Today is the first time in 15 years that the NASDAQ has finally crossed 5,000, revisiting highs last seen 15 years ago. Broad markets rose in sympathy as investors either ignored soft economic data or took that weakness as further signs of a Fed that will be forced to remain on hold. We can’t help but be reminded of the Wall Street saying, “Don’t short a dull market” or “Don’t fight the tape.” Regardless, we continue to push higher with the S&P 500 gaining 0.59% to 2,117 for the day.
Cannabis stocks begin a new month with a long awaited new ticker, Indoor Harvest (OTC Pink: INQD). Despite the new shiny toy, the market remained quiet.
Daily Positive: Two Rivers (OTCQB: TURV) came out with news confirming the GrowCo dividend to TURV shareholders. Greenhouse growing is a technology that is largely ignored by this space. However, we see opportunity for lower costs associated with greenhouses. Time will tell.
Daily Negative: The lack of enthusiasm continues for the sector despite the ongoing bull market in the broad markets.
About this time last year, cannabis stocks were experiencing the heights of the bubble. Stocks were exploding north by double and triple digits daily. Market caps were reaching levels of insanity on nothing more than press releases. Investors were flocking to the sector at dizzying rates. It is hard to imagine that euphoric and manic behavior, as the market seems to be drifting endlessly lower despite the sector’s massive progress and growth.
It is interesting to draw parallels to other bubbles in history and today is of interest with the NASDAQ eclipsing 5,000 for the first time in 15 years. Looking at other bubbles in time is not a predictor of the future but can be a good tell of investor behavior. In the depths of the tech bust, investors left in droves, and the outgoing tide exposed the low quality and/or fraudulent tech companies. Sound familiar yet?
Bubbles usually retrace the bubble upside move, which is what we are seeing in the cannabis industry. Also remember, few of the bubble companies go on to survive into the future market. How many tech stocks in the market today survived the tech bubble? Which bubble is which below: