Thursday Creeps Higher

graph creep

U.S. equities continued to creep higher today extending its recent outperformance over international markets. This performance gap is starting to feel a bit discomforting given the parabolic outperformance of the S&P 500 versus the MSCI EAFE (international benchmark) shown in this chart:

MP Chart

The S&P 500 notched another small gain today to finish up 0.37% to 2031.

Cannabis indices are continuing to work off the election hangover. MJIC Marijuana Index posted a small gain of 1.15% and Benzinga 420 Marijuana Index decreased by 4%.

Daily Positive: mCig has been working on a S-1 filing to spin out its VitaCig brand for 7 months. Today, the company announced the S-1 has been approved. Investors cheered as the stock rose by 6.68% on strong volume.

Daily Negative: GrowBlox suffered today following an update regarding their underwhelming license approvals in Nevada. GBLX sold off by 24.5%.

OTC stocks are typically development stage companies. Trying to get a business up and running is a challenge all in its own. Managing a public presence adds a layer of complexity, which should be considered before any company goes public.

Getting tangled up in lawsuits is a potential death knell given the distractions from costs, time and the disruption to progress. This generally equates to a capital impairment given the incredible uncertainty and has been reflected in the market today with one name taking a sharp decline. We do not like to see unnecessary drama around a company and consider that a sign to steer clear.

 

The discussion above is provided for informational purposes only and does not constitute an offer of, or solicitation for, any investment services or products offered by the author. The author is not making any investment recommendations and the opinions above do not constitute investment advice. Reference to above indices [and companies] is based on information provided by sources the author believes to be credible. Investing in the cannabis industry, as with other industries, presents certain risks including the risk of loss on an investment.

Morgan is a Founding Partner and Managing Director of Poseidon Asset Management. He is the Chief Investor of their Cannabis Focused Fund. Morgan previously worked for a privately owned Registered Investment Adviser and earlier was at UBS Financial Services focusing on wealth management. Morgan believes in the potential of the cannabis industry and likes having an active involvement as it develops. You can follow him on Twitter @PoseidonAsset.

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