Last week, we revealed that Crowdability just started covering micro-cap investments.
As we explained, micro-caps are a rare kind of publicly traded stock:
The kind that give you the chance to pocket big profits fast. And to show you what we mean, we shared several examples of micro-caps that recently helped investors double their money.
But big, fast gains aren’t the only advantage of micro-caps. They also offer another huge advantage…
And once you see how valuable it is, I suspect you’ll want to start investing in micro-caps immediately.
Profit Like a Venture Capitalist
As we’ve been showing our readers for close to six years now:
The only way to become truly wealthy from your investments is to get into an emerging trend early — and then cash out for a fortune down the road.
For example, look at Facebook’s first investor, Peter Thiel. Thiel invested in Facebook when it was a tiny startup in Mark Zuckerberg’s college dorm room.
But when Facebook IPO’d in 2012, Thiel turned every $1,000 he invested into $2 million.
That’s a 200,000% gain.
The thing is, if there’d been a market meltdown before Facebook was able to go public, the company could have delayed its IPO plans… or cancelled them entirely.
Things could have turned out very differently for Facebook, and for Thiel.
The Hottest Sector in the U.S. Today
And this brings us to what I consider the greatest advantage of micro-cap investing:
Micro-caps give you a way to make big gains from emerging sectors, just like you would with a startup. But they also give you a way to protect yourself from market risk!
To show you what I mean, let me give you an example from what’s perhaps the hottest sector in the world: the marijuana market.
There are two main reasons pot is so hot right now:
- The Canadian cannabis market is exploding. Following federal legalization of recreational pot in late 2018, the Canadian market is exploding — from $1.3 billion to an expected $6 billion in 2025.
- Trump just made one of the key chemicals in cannabis, CBD, legal at the U.S. federal level. CBD doesn’t get you “high.” Instead, it’s believed to have medicinal benefits that can treat everything from anxiety and inflammation, to pain and cancer.
This is why The Brightfield Group is predicting that CBD sales will grow from $619 million in 2018, to $5.9 billion by the end of this year.
And we believe this is just the tip of the iceberg.
But as an investor, simply identifying a hot sector isn’t enough.
You still need a proven investment strategy.
Otherwise you could lose your shirt.
Why Bigger Isn’t Always Better
For example, many investors’ first instinct is to seek out “safe” investments.
And Main Street investors tend to equate the safety of a company with its size. That’s why so many of them make the mistake of putting their money into large-cap marijuana stocks.
But as it turns out, this is very risky. You see, all the hype surrounding cannabis has already caused large-cap pot stocks to soar. For example:
- The market cap of Tilray (TLRY) sits at $4.9 billion.
- Aurora Cannabis (ACB) commands a $9.2 billion market cap.
- And Canopy Growth (CGC) is worth $16.5 billion.
These companies trade at price-to-sales ratios of 90x. That’s roughly 45 times more expensive than the average large-cap stock.
Bottom line: new investors in these stocks are not going to earn the biggest returns as the marijuana industry grows. There’s simply not enough upside left in these stocks.
Even worse, since these companies have such bloated valuations, these stocks could crash the fastest and hardest should there be a temporary downturn.
And this is precisely where micro-caps come into the picture...
Going Small to Win Big, Again and Again
As I explained, new investors tend to focus on stocks they perceive as “safe” — i.e., large-caps.
But as I revealed, this is a flawed strategy.
Not only will investing in overvalued companies limit your upside, but it puts your capital at great risk. And that’s why, personally, we avoid these types of stocks.
Instead, when investing in the marijuana market, we invest in micro-caps.
You see, because micro-caps have such low market caps, they often get overlooked by new investors. This keeps their prices low.
And not only does this give us the opportunity to earn bigger returns as their prices rise…
But because they tend to be undervalued and trade so cheaply, if there’s ever a market downturn, they’ll be less likely to drop by a significant amount.
This protects our downside!
Backdoor “Pot Stock” Profit Opportunity
As you learned today, micro-caps offer investors like you and me a way to maximize our profits from the marijuana market, with the least amount of risk.
And now that you understand this, we have something very important to share with you:
We recently identified what is perhaps the most revolutionary, and most undervalued marijuana company in the market today.
Its stock is trading at a 90% discount to its large-cap peers.
Which is why we believe this single company could hand you profits of 20,584% this year.
And tomorrow, Wayne will share more details of this company with you.
So stay tuned!