Wall Street’s been lying to you!
Put-to-call ratios, head-and-shoulder patterns, earnings growth, Fed policy…
For years, Wall Street brokers have been filling your head with these complicated signals.
But signals like these are hogwash.
As we revealed yesterday, if you want to generate big, consistent profits, you simply need to follow this simple chart:
This is the 3-Step Market Cycle.
Once you understand it, not only will you know exactly when to dive into a new sector… but you’ll also know when to cash out for a windfall of profits!
So now it’s time to make good on our promise from yesterday:
To show you how to use this cycle to make a fortune in one of the most explosive sectors of our time:
The market for legal marijuana.
Pot of Gold
No sector in the market is hotter than legal marijuana right now.
Experts predict it will be the next trillion-dollar industry.
To put that number in perspective, it will make marijuana as big as smartphones!
But as you learned yesterday, no emerging market goes straight up…
Instead, new markets evolve in a 3-step cycle.
And the market for marijuana is no exception…
Phase 1: Speculation
As you might recall, Phase 1 of any cycle is when a new market comes bursting to life.
Here’s how it happened for the legal marijuana market:
Ignited by more and more U.S. states legalizing cannabis — and countries like Canada legalizing it federally — marijuana’s 3-step cycle got off to a booming start:
- The mainstream media wrote dazzling stories about this new market. People Magazine gushed about “Marijuana Millionaires,” while USA Today dubbed marijuana the new “gold rush.”
- Thousands of tiny new companies rushed to take advantage of this gold rush — from medical marijuana and “edibles” startups, to cannabis-infused beverage companies. These startups didn’t have much that was “real,” but they sure had big dreams.
- Celebrities jumped in, too — from Snoop Dogg to Martha Stewart.
Welcome to Phase 1: Speculation!
With excitement running wild and everyone chasing profits, the sector soon got flooded with capital…
In 2018, venture capitalists raised nearly $900 million for marijuana investments.
That was up nearly 10x from just four years earlier, and made it the biggest year in history for venture funded cannabis companies.
But it wasn’t just VCs clamoring to get in on the action…
“Pot Stocks” Skyrocket
Given the Phase 1 frenzy, dozens of “pot stocks” were able to go public in high-flying IPOs.
In Canada, for example, these companies raised more than C$1 billion.
For individual investors like you, this was a perfect environment to make lightning-fast profits.
Shares of AmeriCann, Inc. (ACAN) soared 375% in 90 days:
Shares of MariMed (MRMD) rallied 228% in just 36 days:
And shares of Zynerba Pharmaceuticals (ZYNE) jumped 275% in only 11 days:
But this was still Phase 1.
And as you might recall, Phase 1 is all about hype…
What Goes Up…
You see, the skyrocketing prices of these stocks wasn’t based on fundamental analysis.
For the most part, it was based on blind excitement, unrealistic expectations, and hype.
Furthermore, in Phase 1 of any industry, it’s impossible to know what the market will look like in the future:
For example, in the case of cannabis, will the sector’s “winners” be medical marijuana companies? Edibles startups? Drug discovery platforms?
The fact is, in this part of the market cycle, not even the “experts” have a clue. So eventually, there comes a reckoning…
As soon as it becomes clear that these companies will never meet investors’ initial expectations, these stocks tank.
And that’s exactly what happened with pot stocks, including the ones I mentioned above.
Let me show you what I mean.
And here’s ZYNE:
As you can see, after their quick run up, these stocks got crushed…
Within months, they fell an average of 71%...
And unfortunately, investors like you lost a fortune.
Timing is Everything
As you learned today, simply knowing that the 3-Step Market Cycle exists isn’t enough…
You also need to understand timing.
More specifically, you need to know exactly when to dive into a new sector…
And when to cash out for a windfall of profits.
So, next week, Matt and I will explain the next two phases of the Market Cycle.
As you’ll learn, understanding them will help you pinpoint the perfect time to invest in legal cannabis.
So stay tuned!