For the very first time, Tim Melvin is appearing on Fast Profits.
He's doing what he does best – bringing you two rare hidden "gems" in the market that can lead you to almost unheard-of returns.
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For the very first time, Tim Melvin is appearing on Fast Profits.
He's doing what he does best – bringing you two rare hidden "gems" in the market that can lead you to almost unheard-of returns.
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When you adjust estimates for the "street" (the black market), cannabis is already a $60 billion industry in the United States.
The legal cannabis sector in this country alone was worth a "mere" $12 billion in 2018. We've carved out a nice chunk of that for ourselves: All but two of the positions in the National Institute for Cannabis Investors (NICI) flagship Cannabis Investor's Report model portfolio are up by double digits; several are closing in on 100%.
Those are good gains – this is America's most lucrative industry, after all – but all indications point to much, much bigger profits between now and the middle of the next decade.
To find out exactly where those profits will come from, NICI Executive Director Greg Miller sat down with Money Morning Special Situation Strategist Tim Melvin to talk about all the ways he's planning on cashing in over the next five to 10 years.
There are some massive calls made during this sit-down. One in particular strikes me as a way you could eventually be able to build and fund your entire retirement through cannabis plays.
Yes, I'm talking income strategies here!
But even more shocking than that, Tim pushed all his chips in and predicted – to the month – when he expects the White House to move to de-schedule marijuana and effectively end nearly 100 years of prohibition.
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Currently, there don't seem to be a lot of choices available for fixed-income investors.
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I was listening to a Meb Faber podcast recently. Faber referenced a study by Longboard Funds' Eric Crittenden that found 80% – eighty percent – of all stocks have returned 0.0% – zilch – since 1989.
That's a pretty explosive "allegation," if you will, so I immediately geeked out! I had to track down and read the study and run a few tests on the conclusions, to see for myself and for my readers.
The finding, which I confirmed independently, is shocking: The report, with its immense implications for investors, is correct.
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Whenever markets get like they are now, everyone loves to talk cash – cash on hand, cash coming off the sidelines, going to cash, cash, cash, cash. Watch any financial news show on cable, and it won't be long before you hear it mentioned.
This is one of the funniest discussions I think I have ever heard. That it's even up for debate is pretty ridiculous, but I guess they have to fill airtime with something.
Particularly dumb is the chin-wagging about the "low returns" on cash these days.
The return on cash is minimal, I agree, and for sure it's more comfortable to hold cash when you're collecting a nice interest payment, but earning interest is not – repeat, not – why you hold cash.
How much interest does a carpenter earn on his hammer? None, of course… but he can sure make a big pile of cash putting the hammer to work.
It works the same way with stocks. Cash is a tool – an essential tool – for investors.
Having cash means you can quickly and easily take advantage of bad markets or jump on "fallen angel" opportunities that come along from time to time. Being able to do that at will is the difference between doing okay as an investor and doing really freaking fantastic as an investor.
So that leaves us with two questions: "How much cash should I have in my portfolio, and what should I do with it?"
Those are big questions that investors have grappled with for years. I'm going to show you the answers.
Not only are they simpler than anyone realizes, but they're the key to maximum wealth...
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A couple weeks ago, I took a trip up to Maryland to visit my publisher, Money Map Press, and attended their annual holiday party.
The party was international themed this year, and quite extravagant if I don't say so myself. I didn't hesitate to take full advantage of more than a few free cocktails at the open bar throughout the night, but I still remember seeing a Chinese dragon and few fan- and umbrella-bearing women dressed in traditional Chinese attire.
Prior to the party, I brought along some copies of Mario Gabelli's book, "Merger Masters: Tales of Arbitrage," and handed them out to my team of editors as little Christmas gifts. If you want to learn a little more about what you can gain from reading the book, including how to make lots of money doing arbitrage, take a look at my most recent article.
And in that same spirit, I want to give all my subscribers a little gift...
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If you were to talk to either Tim Melvin or Bill Patalon, you'd come away with enough investing ideas to last two lifetimes.
But get both of them together, and you've got a mini hedge fund on your hands.
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If you want to learn the art of deal-making on a very high level, you may consider reading "Merger Masters: Tales of Arbitrage" by Kate Welling and Mario Gabelli.
I just finished this new book, and it's outstanding. I highly recommend it to all of you.
Reading the book gave me some pause, as it occurred to me just how much the arcane art of risk arbitrage dictates the way I look at markets and companies.
I have traded arbitrage almost from the start of my investing career. Some of my biggest success stories were from liquidation arbitrage situations where the value of the assets appreciated during the liquidation phase, and we collected far more than initially anticipated.
But the value of doing merger deals is not just the money that we can make, but the information and lessons we can learn from studying the deal markets on a daily basis.
Analyzing merger deals and evaluating the likelihood that all the regulatory hurdles, shareholder approvals, and financing issues can be overcome to allow quick closing on profitable terms is more of an education than any MBA program in the country if making money in the stock market is your ultimate goal.
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We get hammered every day with loud suggestions on a stock to buy right now that could make you a gazillionaire by lunchtime tomorrow.
Today, I'm correcting this imbalance.
I'm here to show you the three stocks to never own. And they could be in your portfolio right now...
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If you're something a geek, you may spend just as much time as me reading academic papers and research about markets and valuations.
And you may find one paper about the market and valuations quite valuable.
Wim Antoons, the head of asset management at Bank Nagelmackers in Brussels and a member of the Brandes Institute Advisory Board, wrote the paper. The Brandes Institute is a research firm associated with legendary value investor Charles Brandes, and they publish some cutting-edge research on a pretty regular basis.
The paper was titled "The CAPE Ratio, and Future Returns: A Note on Market Timing," and it covered the use of the 10-year average P/E ratio as defined by Nobel Prize-winning Yale Professor Robert Shiller. Professor Shiller uses a definition of earnings that are adjusted for inflation, and this gives us a much clearer view of the market's current valuation.
Not surprisingly, the study found that when the Cape Ratio is low, future stock market returns tend to be higher than average. When the ratio is very high, future stock returns tend to be awful. This has been studied by numerous academics and investment managers who determined it a fairly accurate measure of what we can expect from stock prices over the long term.
The ratio is currently at 29, which is well above the historical average of 16.7. So we can expect that future stock market returns will be lower than the historical average, and Antoons' study tells us that future returns will be somewhere between bad and abysmal.
But you can't just assume that a high Cape Ratio means that stock prices will immediately fall. The problem we face as investors is that the path to lower returns is not necessarily straight down; there are actually many paths to lower returns.
So let's take a look at the three scenarios that could lead us down...
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