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Wealth Building Strategies

Reefer Madness Could Make You Rich

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Posted by Sean Broderick - The Edelson Institute

on Monday, 20 November 2017 06:08

Cannabis stocks have zig-zagged for months. It’s been a regular roller coaster! Now, the next breakout is here. Just how high could this next round of reefer madness take us?

Dude … pretty darned high!

Here’s a chart of the Horizons Medical Marijuana Life Sciences ETF (TSX: HMMJ) (OTC Grey: HMLSF). It’s a basket of 37 leading cannabis-related stocks operating in North America.

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You can see that HMMJ is on a wild ride. After soaring into August, it slumped all that month. It didn’t make new highs until September. Then it was off to the races until October, until it went into consolidation. Again!

But now … well. Now, it’s time to shatter that ceiling.

The most recent thing to light a firecracker under cannabis stocks is the news that broke on Monday.

Alcohol goliath Constellation Brands is guzzling nearly 10% of Canada’s premier marijuana company, Canopy Growth. It only cost Constellation $190.9 million. Such a deal!



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Wealth Building Strategies

Leonardo da Vinci’s Salvator Mundi sells for record $450m

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Posted by Martin Armstrong - Armstrong Economics

on Thursday, 16 November 2017 06:32

DaVinci-Salvator-MundiLeonardo da Vinci’s 500-year-old painting known as Salvator Mundi (Saviour of the World) is the only work in private hands. It just sold at Christie’s auction room in New York for a record $450m – almost half-billion. The painting apparently once belonged to King Charles I of England back in the 1600s. The last time it was sold at auction was 1958 when it was sold in London for a mere £45. At that time, it was generally believed to have been the work of a follower of Leonardo rather than the work of Leonardo himself.

The painting was sold by the family trust of the Russian billionaire collector Dmitry E Rybolovlev, who is reported to have bought it in a private sale in May 2013 for $127.5m. So that’s a pretty good profit. It is the highest auction price ever paid for any work of art.  There are fewer than 20 of Leonardo paintings in existence. The Salvator Mundi, is believed to have been painted sometime after 1505. The bidding began at $100m and the final bid for the work was $400m, with the buyer’s premium, the full price up to $450.3m. The unidentified buyer was involved in a bidding contest, via telephone, that lasted nearly 20 minutes. The mystery buyer hopefully lives outside of New York so that avoids the sales tax. Purchases above $110 are subject to a 4.5% New York City Sales Tax and a 4% NY State Sales Tax. That makes anything bought in New York City subject to a total Sales and Use Tax of 8.875%. What is astonishing, is that with taxes, rates rise with the more people. That is counter to capitalism which dictates that prices decline with scale. Government costs rise with the scale showing something is just not right!

Obviously, this is serious money still moving off the grid!

...also from Martin:

EU Preparing for the Banking Crisis

and...

Our Ignorance of Cycles Causes them to Exist?



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Wealth Building Strategies

Stock Ownership Figures Look Nothing Like A Bubble

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Posted by Chris Ciovacco - Ciovacco Capital Management

on Wednesday, 08 November 2017 06:57

Summary

Are stock ownership figures nearing bubble territory?

Latest polling data provides some insight into the bull's sustainability.

Are annual charts leaning bullish or bearish?

A Euphoric, All In Bubble?

Once a year, Gallup conducts a poll that provides some insight into the sustainability of the bull market in stocks (SPY). The concept of an investment bubble implies irrational investor confidence. If skepticism and fear were near all-time, bubble-like lows, we would expect a very high percentage of U.S. households to be in the stock market (VTI), as was the case near the euphoric 2007 stock market peak (see graph below).

saupload Gallup2007HouseholdOwnershipChart

Are We Back To Bubble Territory In 2017?

....continue reading HERE



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Wealth Building Strategies

The Six Groups of Investors and Traders

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Posted by Martin Armstrong - Armstrong Economics

on Wednesday, 25 October 2017 05:45

59ee857f94cd15059cd2df0b

The recent report by the Commodity Futures Trading Commission (CFTC), shows that the professional investors have continued to bet on falling Dow Jones “short” as private investors are starting to bet heavily on rising prices ( “Long”). Professional investors remain suspicious of a further rise in the US stock market. The private investors’ view is exactly the opposite. The question is; Who will be right?

There have been plenty of times that the professional is dead wrong and the average person on the street has actually outperformed the professionals. Reuters reported that 69% of hedge fund investors expected the second half of 2017 to be worse than the first half. So why are the professionals so pessimistic?

When you live and breath the market every single day, it is hard to get a grip on vertical markets. The professionals, more so that even the average street investor, tends to do worse in such markets because it makes them uncomfortable. Then there is the self-gratifying notion that the market is over when the retail invest comes in. But they tend not to look at the fact that there is a huge difference between the average retail investor and the person who has never invested who rushes in to join the party at the top simply be everybody else if there.

MAA-TokyoI have told the story before how I was doing an institutional only seminar in Tokyo at the Imperial Hotel. This individual bribed someone in the hotel to get in. He came up to me and apologized offering to pay. He said he just had to speak to me. I asked him what was the problem, He explained he had bought the Japanese share market on the very day of the high and now it was crashing. His investment was $50 million. But the intrigue came when he said it was the first time in his life he had purchased any stock. He then had my attention since I was talking to the guy who bought the high.

I asked him what made him buy that day for the first time in his life? He said brokers had called him every year saying the Nikkei rallied on average 5% every January with the New Year. He watched it for 7 years and then finally bought the high. That is what I mean as the difference between the average retail investor and the fool who rushes in at the end because everybody else is there. It is when that final group of people rush in that marks the end of the market – not when simply average investors buy who follow the market generally.

We have four actual groups:



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Wealth Building Strategies

This billionaire’s “$5 million test” will make you a way better investor

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Posted by Simon Black - Sovereign Man

on Thursday, 19 October 2017 19:16

supertankIn 1982, a man named Jim Tisch bought seven supertankers for $42 million. He found them by cold calling companies he found in the Yellow Pages. 

Yes, $42 million is a lot of money… but these tankers were each four football fields long. That’s a lot of steel. And they could carry between 2-3 million barrels of oil. 

And these ships were built just eight years earlier at a cost of $50 million apiece. 

Jim Tisch is the son of the legendary Laurence “Larry” Tisch, the late billionaire founder of Loews. Corp – a conglomerate that has owned hotels, movie theaters, insurance, cigarettes, oil and watches over the years. 

And like his Dad, Jim had a nose for value… 

Low oil prices in the early 1970’s (around $3 a barrel) caused demand to soar. To keep up with the growing demand, everyone rushed to build supertankers (which can take years to complete).   

Then the Arab oil embargo in 1973 sent oil prices soaring to $12 a barrel by 1975. 

The Iranian Revolution (and ousting of the Shah) followed in 1979… And Iran drastically slashed its output. Oil jumped to over $37 a barrel. 

Now there was much less oil coming out of Iran (and a year later, Iraq), but the tankers were still floating in the water. 

Tisch started sniffing around for tankers in the early 80s, when, according to Tisch, only 30% of the global fleet was necessary to meet demand. 

That’s why he was able to buy at an almost 90% discount. As he said at a 2006 speech at Columbia University: 

[S]hips were trading at scrap value. That’s right. Perfectly good seven-year-old ships were selling like hamburger meat – dollars per pound of steel on the ship. Or, to put it another way, one was able to buy fabricated steel for the price of scrap steel. We had confidence that with continued scrapping of ships and increased oil demand, one day the remaining ships would be worth far more than their value as scrap. 

By 1990, the market for tankers was turning around… too many ships were scrapped and the volume of oil coming from the Persian Gulf was increasing. 

Noting the strength, Tisch sold a 50% interest in his ships for 10 times his initial investment.
 
He still maintained half ownership… and collected enormous cashflows from operating those ships. 
 
When he first stepped foot on a supertanker, Tisch said he formulated the “Jim Tisch $5 million test.”


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