It has been a wonderful year! The general market indexes are up 25%, unemployment is low, consumer confidence is high, the Fed increased interest rates 3 times and the equity markets do not care. It is just difficult to be negative on anything!
On November 21, 2017, I attempted to approximate an entry date into the marijuana sector:
…based on data I developed from the 2016 calendar year, I would expect the “bottom” for marijuana stocks to be normally distributed on or about December 20-21, 2017…
For the week ending December 29, 2017, my equal-weighted Seeking Alpha portfolio of N=244 stocks generated a return of~31% (see APPENDIX). There were n=160 winners and only n=32 losers. Eighteen of the winners had returns of 100% or more for the week, as follows:
So, entry at the December 22, 2017 close should have worked out nicely and yielded about 31% returns. It looks like the past was a pretty good predictor of the future for a launch.
However, I did not get the NET tax loss selling action I anticipated, so I missed the bottom, but, you know, 31% in one week is not bad. Still, some of the folks commenting on my article and the importance of California legalization were right, and I was wrong. I guess this is why we have comments on Seeking Alpha – to share a variety of thoughts on a topic.
Anyway, 2018 is going to be an extraordinarily favorable year for the marijuana stocks and sector, and while we may not get the 51% returns in January 2018, as we did in January 2017, we might. In any event, it is going to be good…very, very good.
With the California move to implement legalization, Canadian legalization in the summer, and at least