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There was a reason Bill Gross was known as "The Bond King."
Gross co-founded Pacific Investment Management Co. (better-known as PIMCO) - and built it into a powerhouse.
At its peak, PIMCO was the biggest bond investor on the planet - indeed, the Total Return Fund that Gross ran held more than $290 billion in assets.
I worked for "The Bond King."
And I loved it.
As a vice-president in charge of growing PIMCO's inflation-related products, it was my job to get institutions to invest in commodities, inflation-linked bonds (ILBs), a suite of asset allocation strategies, and commercial real estate investments.
Working from an office in sunny Newport Beach, Calif., I courted pension plans, mutual-fund managers, foundations and endowments, and wealth advisors from all around the world.
We referred to these folks as "institutional investors." But it's probably more appropriate to refer to them as the "Big Money Crowd."
When I first started working for "The Bond King," almost none of the Big Money Crowd was investing in commodities or ILBs. We also took asset allocation to the next level - so that was new - and we also innovated the way the institutional folks invested in real estate.
The bottom line: We had to convince a lot of really smart people to change the way they saw their business, to innovate and to do something completely new.
And we did it well.
During my five-year stint, the amount of money the Big Money Crowd invested in our cutting-edge strategies zoomed from about $6 billion to more than $60 billion. By 2006, we basically owned the inflation-related investing space.
And that tenfold move grew the pile of money PIMCO made each year more than any other product - including Bill's baby, the aforementioned Total Return Fund.
My time at PIMCO, and the years since, taught me two things - both of them critical:
- The importance of innovation, and how inventiveness can muscle open the pathways to massive new growth.
- The massive power of the Big Money Crowd, and the catalytic power their investments can have.
Mesh the two - innovation and capital - and you're looking at the wealth equivalent of the universe-creating "Big Bang Effect."
"Meshing" is what we're about to see in the cannabis sector.
And a stock market "Big Bang" is what I'm predicting - one that's a starting line for perhaps the greatest wealth journey of our lifetimes.
Here today, I'm going to show you exactly how to take this insight and win with it...
A Big-Money Blueprint
When I say Big Money, I mean exactly that.
As you read this, more than $21 trillion sits in U.S.-based mutual funds. Pension plans control even more money. And exchange-traded funds (ETFs) hold another $4 trillion.
It's a mind-boggling amount of money. But understand this: When these guys identify an opportunity - an investment "target" - they move in size.
And when that tidal wave of cash comes in, it causes the value of those sector assets to skyrocket.
When innovation spawns new sectors, it's usually the Big Money that floods in first - ahead of the grassroots money from Main Street investors. That's how it played out with info-tech and biotech. And it continues to happen with social media.
But cannabis has been different.
It's giving regular investors the kind of moneymaking chance that comes along maybe once or twice in a lifetime.
You see, with cannabis, Big Money has up to now been frozen in place on the sidelines - its indecisiveness spawned by the reality that cannabis remains illegal at the federal level.
But as I hinted here last Sunday, Big Money's patience has run out.
Just look at the latest moves by Putnam Investments LLC. This Boston-based mutual-fund firm controls $182 billion. And it just bought 6 million shares of 4 Front Ventures - a U.S.-based multistate operator (MSO) - giving Putnam a 5% stake in the company.
Wasatch Advisors Inc., a smaller player with only $18 billion (yes, $18 billion is "small" in the institutional world), now has the second-biggest stake in Cresco Labs Inc. (OTC: CRLBF).
But this next Big Money player is gargantuan: With more than $2.4 trillion in assets, Fidelity Investments now owns a stake in Curaleaf Holdings Inc. (OTC: CURLF) - the biggest cannabis company (by revenue) on the planet.
And now that the New York Stock Exchange (NYSE) has listed an ETF holding plant-touching U.S. based cannabis companies, the "listing" door has been kicked wide open for other U.S. cannabis companies to list.
This means major stock-index operators - like Standard & Poor's and FTSE Russell - will soon add those companies to their offerings. Additionally, another crucial group of Big Money players - the big pension plans - will have to allocate billions of dollars to cannabis stocks to keep their own investment performances from falling behind.
Packing a Pension Punch
For proof, just look at who owns another "must own" cannabis stock for pension plans.
Innovative Industrial Properties Inc. (NYSE: IIPR) trades on the Big Board. It's also a part of the Russell 3000, the Russell 2000, and S&P 600 stock indexes - to name a few.
As I know from my days with "The Bond King," hundreds - heck, even thousands - of mutual funds, ETFs, and pension plans align their investments with these indexes. And because IIPR is part of these indexes, these Big Money players have no choice but to own the stock.
Here are just a few, along with how much money they actually move around:
- New York State Teachers Retirement System - $122 billion
- New York State Common Retirement Fund - $207 billion
- California State Teachers Retirement System - $246 billion
Back during my PIMCO days, I worked the boardrooms of all these players. That was one of the ways I "courted" that institutional money. So I know how it all works. And I've seen how, when these guys target a stock, its share price just zooms.
At last count, 17 state pension plans owned a piece of IIPR. And as other cannabis stocks - the big ones like Trulieve Cannabis Corp. (OTC: TCNNF), Curaleaf Holdings Inc. (OTC: CURLF), and Green Thumb Industries Inc. (OTC: GTBIF) - start trading on the NYSE or Nasdaq, the pension plans and all the other Big Money players will have to own them.
Within this Big Money arena, the cannabis story only gets better.
You see, most of the players I've been talking about so far are what's known in the business as "passive" investors. They're "passive" because they aren't traders - their investments mirror the holdings of whatever index they are benchmarked against.
There's a second group of Big Money players we need to talk about - the "active" crowd.
Their influence is just as big. And an exchange listing of a cannabis stock will draw the "active" players in, too.
The Key to 10x Gains
Active investors see how cannabis stocks can lead to billions in profits. To make that happen, the active players need the ability to trade the millions of shares of stock that a major exchange provides.
This includes pension plans, mutual funds, hedge funds - you name it.
They all see the innovation and growth that cannabis legalization sets up. And, before you know it, they'll be elbowing each other out of the way in a scramble to claim their billion-dollar stakes.
That hasn't happened, yet - but we'll see it soon. We're seeing that "meshing" of innovation and capital right now. That gives individual investors like you a bit more of a window to make your move.
The Big Bang moment for cannabis is here. Move now ahead of the Big Money influx - and you'll reap the windfall of the 10x returns that tidal wave of capital creates. You'll be the one selling your shares to them at prices five to 10 times more than you paid.
But you have to pick your spots. You can't just blindly buy a bunch of cannabis stocks and hope to make a fortune. You need insight into which companies stand the best chance at creating wealth for shareholders. Which management teams are top notch, and which are built to last.
And you can get the drop on everything you need to know to navigate the Wild World of Cannabis Stocks over at the National Institute for Cannabis Investors, or NICI. We tell you what to buy, when to buy, and when to sell.
The path to fortune is never a straight line. So click here to learn how you can become a NICI Member and secure your spot at the Cannabis Big Bang starting line today.
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About the Author
Don Yocham is Executive Director for the National Institute of Cannabis Investors (The Institute) and Director of Cannabis Investing Research for Money Map Press. Before starting his role with the Institute, he was the Head of Private Deals for the publication Cannabis Venture Syndicate. From his first foray into the trading pits of Chicago to introducing institutional investors to entirely new markets in the early 2000s, Don has pretty much covered the entire field of investing in his 25-year career. In the depths of the financial crisis, when the typical investor had lost more than half of their money, his portfolios were up.
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