Yesterday Jeff told you about four new 52-week highs for our subscribers and I’ve got another one for you today.
But this one is a little different from the ones Jeff highlighted.
Yesterday Jeff highlighted “momentum investing” – the tendency of winning stocks to keep winning and losing stocks to keep losing.
He featured Ericsson, Microsoft, Paypal and Mastercard as big winners from our advisers.
The stock I’m going to highlight today has that same momentum characteristic, but also leverages other investing ideas we’ve discussed in the Digest. Namely, tailwinds and the Easter egg hunt.
So, let’s get started.
Investing with the tailwinds is the easiest way to get rich.
Tailwinds refers to the conditions when prevailing trends and/or market conditions are favorable to providing big gains to investors in the right stocks.
Think of the Internet in the 1990s.
The Nasdaq, the benchmark technology stock index, gained 40% in 1995, then 22.7% in 1996, 21.6% in 1997, 39.8% in 1998, and then an incredible 85.6% in 1999.
Qualcomm, Cisco and Microsoft were all leaders in this space and they all experienced huge increases during that time.
Folks who invested at the right time, and in the right stocks, made a fortune with very little money, very little work, and sometimes very little knowledge.
Marijuana stocks have experienced the same kind of growth over the last two years.
We cover these stocks a lot because the opportunity is great – a once-in-a-generation opportunity. More and more states are looking for legalize it, and the federal government is on a steady march to legalize it nationwide.
One way to measure the marijuana tailwind is to look at the ETFMG Alternative Harvest ETF (MJ) that focuses on marijuana stocks. As you can see below, a 45% gain in the last two years certainly speaks to some tailwinds.
And the second principle is the Easter egg hunt.
InvestorPlace CEO Brian Hunt published an essay in our Education Center recently titled, “What Kind of Easter Egg Hunt Are You In?” that makes the point very well. Here is an excerpt.
Picture this…
It’s Easter and you’re ready for the neighborhood Easter egg hunt.
Over 100 eggs have been hidden in a small, local park. Each egg has a treat inside it. You’re told that one special egg even has a cash prize in it.
If you’re in this hunt, which of the two following scenarios would you rather be in?
A: In addition to you hunting for eggs in the park, there are 1,000 other people hunting for eggs. It becomes a madhouse.
B: In addition to you hunting for eggs in the park, there are just 10 other people hunting for eggs.
If you’re like most reasonable people, you picked B.
What does this have to do with investing?
Well, this same dynamic is at work in the stock market every day.
The financial market is where millions of people go to pick through opportunities in stocks, commodities, currencies, options, bonds, and real estate.
In this big market, everyone is looking to buy assets for less than what they are worth and looking to sell assets for more than what they are worth.
Matt McCall provided a pick that combined both – it featured the marijuana tailwind and a stock many had overlooked. While brands like Tilray and Aphria grabbed headlines, Matt found a smaller play with big potential.
And that stock just hit another all-time high.
Last August Matt recommended to his Investment Opportunities subscribers that they buy Innovative Industrial Properties Inc – a marijuana REIT – at $33.70.
Since his recommendation, the stock has soared 130% and is trading at $86.21.
Here is what Matt wrote about the stock when he recommended it.
IIPR is one of the first to see and take advantage of the opportunity in helping marijuana companies with the growing process. Founded in December 2016, the company made its IPO that same month on the New York Stock Exchange. IIPR was the first publicly traded U.S. company to provide real estate capital to the medical marijuana industry.
I love IIPR’s business model. The company buys freestanding properties from medical marijuana growers that are – and this is key – already approved by their respective states. IIPR then leases the properties right back to the growers under a long-term agreement. This gives the growers an infusion of capital to expand their operations and increase production. In return, IIPR receives regular rent payments under a long-term lease.
Many investors think of trends too narrowly. They focus on the stocks that grab headlines.
Matt finds the small stocks many overlook and have the potential to skyrocket – in IIPR’s case 130% in just seven months.
It’s always great to see one of your investments soar. As Jeff emphasized yesterday, it’s easy to let doubt creep in after this happens. You want to lock in your profits.
But that’s often a recipe for missing the biggest gains.
Luckily, Investment Opportunities subscribers can depend on Matt for guidance.
And, he’s about to pick another marijuana stock on April 4.
He’s focused on using the marijuana tailwinds and finding those small, little-known stocks that can deliver the biggest gains for his subscribers.
IIPR is just one of his picks that has experienced huge gains. You can see his presentation on how he is picking these stocks by clicking here.
Luis Hernandez, Managing Editor
and the research team at InvestorPlace.com
