Marijuana stocks just received one of the biggest "buy signals" yet, and it came from one of the most unlikely sources.
During the financial crisis of 2008 to 2009, an investor named Danny Moses and his associates made a huge amount of money shorting the subprime market for mortgages in the United States.
What does that have to do with marijuana stocks?
Money Morning Director of Cannabis Investing Research Greg Miller points out that those types of contrarian moves can be visionary calls that take insight and courage.
Insight and courage are always in short supply.
THREE STOCKS: Any one of these cannabis companies could potentially deliver a 1,000% windfall. Click here to learn more...
Moses was recently on a CNBC program called "Fast Money" discussing marijuana stocks.
But he wasn't talking about shorting them. In fact, he is very long on weed stocks.
Cannabis is one of the sectors we at Money Morning like the most. And so does Danny Moses.
In fact, Moses believes investors can make more money in weed stocks than they did by predicting the housing bubble accurately.
For our model marijuana stock portfolios, this is good news. Let's take a look closer at what he has to say.
Why Danny Moses Is So Bullish on Marijuana Stocks
Danny Moses might be most famous for "The Big Short" and the financial crisis, but he knows about far more than real estate and housing prices.
He started his financial career in the early 1990s working for MBIA Inc. (NYSE: MBI), analyzing municipal bonds. Then, he worked as an institutional broker for several Wall Street firms, such as Oppenheimer.
Next, he worked for Frontpoint Partners as a trader, and that was the era of "The Big Short."
Right now, Moses is on the investment committee of Merida Capital Partners. This company is a private equity fund focusing on the marijuana industry and the factors that will drive its fundamental growth.
Plus, he recently started his own company, Moses Ventures, to focus on marijuana investments of different asset classes.
So why is this financial expert targeting cannabis?
The Big Long: Marijuana Stocks
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Why is Moses bullish - to say the least - on the weed sector? Three major environments are poised to benefit marijuana stocks: politics (more legalization), economic factors (demand, products), and wellness (the use of marijuana and hemp in medical and wellness products).
Now, remember, weed is still illegal on the federal level, even though more and more states have legalized it. Because banks are regulated by federal agencies, banks have historically been very reluctant to do business with marijuana companies. Banks avoid risk, and from their perspective, anything that is only quasi-legal - or fully illegal, as far as U.S. law goes - is to be avoided.
As a result, marijuana companies have found it difficult to get loans to expand their businesses. Banks are where the loans are.
Moses sees it this way: before the housing bubble burst 10-plus years ago, the market was not regulated enough and had too much leverage (i.e., too much debt for its value). But the marijuana stocks market currently has the opposite problem: It's regulated too much and can't get enough debt (loans) for the amount of value it has.
And when banking services move to serve the marijuana industry, as will be likely, the market is poised to be explosive.
So the play to target is the inflow of debt capacity into the cannabis sector. It would make capital expansion costs drop.
So stay tuned to see the large companies get ready to lend to the marijuana industry. It will be where the money is.
These 3 Stocks Are the Key to 2019's Greatest Profits
The 2018 midterm election was a turning point for the cannabis industry.
We expect nothing short of historic profits by the end of the year.
But not all pot stocks will hand you life-changing wins. In fact, often the companies making headlines are least likely to see the biggest gains.
These three stocks, on the other hand, are flying under the radar... for now. Each of them could see exponential stock price acceleration at any moment, and if you get in before that happens, you could turn a token stake into a lifetime of wealth.
I don't know of any other sector providing anywhere near this level of growth now.