Thailand Could Fuel Red-Hot Pot Stock Market

Wednesday, 18 July 2018
Albert Park, Melbourne
By Bernd Struben

  • NOPEC could dramatically change the oil market
  • ‘Trade Secrets’
  • In the mailbag
  • ‘New South Wales’ Dangerous Move on Doctor–Patient Confidentiality’

Did you hear the latest out of Thailand?

No, not the dramatic cave rescue.

Apparently, the Thai’s have caught ‘marijuana mania’.

That’s how small-cap analyst and pot stock expert Sam Volkering labels the global move towards legalising cannabis. A move that’s seen some leading pot stocks enjoy gains of 2,000% or more in a matter of months.

It’s been a gradual process to date. One that requires overcoming decades of government propaganda demonising cannabis. But as more US states, and leading nations like Canada, move to legalise its medicinal and even recreational use, that process is speeding up. Quickly.

Thailand has long been known for its potent strains of cannabis. Paradoxically, the nation is also well known for its tough drug laws. For the foreseeable future those laws will remain in place for recreational use.

But Thailand is not blind to the billions of dollars on offer in the burgeoning medicinal marijuana market. And they want in.

From Bloomberg:

Thailand, which in the 1980s was one of the world’s top exporters of cannabis, wants to reap the rewards of the $10 billion-dollar-plus marijuana market. As more countries embrace the medicinal qualities of cannabis, the Government Pharmaceutical Organization — under the Ministry of Public Health — is trying to persuade the military government to approve studying the drug so it can market it for medical use…

The military government’s cabinet of ministers in May gave the green light to amend the country’s drug laws to allow research on the effects of medicinal marijuana on humans. The bill is currently being debated in the National Legislative Assembly, which is expected to give the nod to legalization in up to nine months before it becomes law…

The global marijuana market is projected to reach $23 billion by 2022, with an annual growth rate of 22 percent in the five-year forecast, according to Arcview Market Research.

If Thailand gives the green light to medicinal cannabis, it will be the first nation in Asia to do so. But almost certainly not the last.

It will likely also heat up the already red-hot pot stock market.

As Sam Volkering writes:

Every time cannabis gets the greenlight, everyday investors have a real chance to collect serious wealth.

In May 2016 Ohio lawmakers passed House Bill 523. Making it the 25th US state to legalise medical cannabis.

At the same time, Vapor Group — a company that sells vaporiser and electronic cigarette devices — began a four month vertical climb that saw the stock soar 2,000%.

In that same window, another weed company, Global Hemp Group, jumped as much as 700% higher.

Australian pot plays have lit up the market too.

In February 2016, the Federal government announced a series of initiatives to legalise cannabis for medical and scientific purposes. Investors who got in just as Auscann Group began to take off in early February 2017, are sitting on gains as high as 490%.

Over at Australian Small-Cap Investigator, Sam’s been atop the massive potential gains on offer from this new industry since the beginning. Though he’ll be the first to tell you that investing in these stocks in not without risk. Far from it.

When you’re hunting for five, 10 or even 20-baggers you need to have the stomach for some risk. If that’s you, Sam may have just the recommendation you’re looking for.

It’s an ASX listed pot play that Sam believes could rocket 495% as it rides the sweeping tide of marijuana mania.

Ready to learn more? You can find out all the details here.

Now a look at the markets.

Markets

Overnight the Dow Jones Industrial Average closed up 55.33 points, or 0.22%.

The S&P 500 gained 11.12 points, or 0.40%.

In Europe the Euro Stoxx 50 index finished up 8.42 points, or 0.24%. Meanwhile, the FTSE 100 rose 0.34%, and Germany’s DAX gained 100.52 points, or 0.80%.

In Asian markets, Japan’s Nikkei 225 is up 151.68 points, or 0.67%. China’s CSI 300 is up 0.46%.

In Australia, the S&P/ASX 200 is up 38.36 points, or 0.62%.

On the commodities markets, oil continues its slow decline. West Texas Intermediate crude oil is US$67.83 per barrel. Brent crude is US$71.80 per barrel. How much further does crude have to fall? As I’ve been writing for months now, most likely a fair bit. (More on oil below…)

Turning to gold, the yellow metal is trading for US$1,228.06 (AU$1,662.91) per troy ounce. Silver is US$15.59 (AU$21.11) per troy ounce.

One bitcoin is worth US$7,359.73. Bitcoin bears take note. The world’s largest crypto by market cap is now up 15.9% since I penned Monday’s Port Phillip Insider. Could it be in for another sharp run higher? Our in-house crypto experts Sam Volkering and Ryan Dinse sure think so. Watch this space.

The Aussie dollar is worth 73.85 US cents.

NOPEC could dramatically change the oil market

The price of oil, as with any commodity, is largely determined by the most basic economic principles of supply and demand.

Global demand for oil, despite the growth in electric vehicles and hybrids, remains strong.

Unfortunately for oil bulls — but fortunately for consumers at the pump — the global supply of oil has never looked stronger.

From Bloomberg:

Futures in New York edged lower in after-hours trading after the American Petroleum Institute was said to report nationwide crude inventories rose 629,000 barrels last week. Analysts were expecting a 4.1 million-barrel drop in supplies, according to a Bloomberg survey.’

I’m not sure which analysts Bloomberg is referring to. But their expectations on US crude inventories was off, to the down side, by more than 4.7 million barrels.

That’s one heck of a miscalculation.

You can see the continuing slump in WTI in the following chart, bringing it below the 50–day moving average:

Port Phillip Insder 18-07-18

Source: Bloomberg

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Now I’m not much for technical analysis. But a good rule of thumb is any price drop below the 50-day moving average is a bearish sign. As if we need more bearish signs for crude.

As you’re likely aware, OPEC’s last round of reduction cuts in November 2017 managed to send the crude price higher. In fact, Brent crude hit a three year high just last month. A spike that was aided by output losses in Venezuela and fears over the impact of new US sanctions on Iran.

You’re also likely aware that Saudi Arabia and Russia (not an OPEC member) have agreed to up production to counter any losses from Iran.

What you might not know is that OPEC’s days may well be numbered.

As Bloomberg reports:

U.S. Senator Chuck Grassley, along with a fellow Republican and two Democratic lawmakers, introduced legislation in the Senate that’s aimed at allowing the government to bring lawsuits against OPEC members for antitrust violations.

Lawmakers in the other chamber of Congress, the House of Representatives, already introduced a version of the “No Oil Producing and Exporting Cartels Act,” or NOPEC, bill in May. Congress has discussed various forms of NOPEC legislation since 2000, but both George W. Bush and Barack Obama threatened to use their veto power to halt it from becoming law. The risk for the Organization of Petroleum Exporting Countries is that U.S. President Donald Trump may break with this precedent.’

I’d say there’s more than just a ‘risk’ of Trump breaking precedent and supporting this law. He’s already taken to Twitter on numerous occasions to lambast the cartel.

As for those futures traders who were betting on US$100 per barrel oil to make a comeback this year? Well, anything can happen. But I’d be placing my bets in the other direction…below US$60.

‘Trade Secrets’

Yesterday the ASX 200 lost 0.6%. At time of writing, the index is up 0.6% in intraday trading. As you can see below, there’s been a lot of that going on over the past month.

Port Phillip Insder 18-07-18

Source: Google Finance

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While it’s been a fairly topsy turvy month, the index is still near the 10-year high it hit on 9 July.

Will it continue to track higher…or is it set for a sharp correction?

There’s a good case to be made for both scenarios. Which brings me to a more important question.

If you’re a stock trader, do you have a proven method for making the most out of a rising or falling market?

That’s one of the key attributes in trading veteran Jason McIntosh’s Quant Trader. The algorithms he designed are coded to clue in on both long and short signals. Meaning when the market does turn, his subscribers should find themselves well-positioned.

As I mentioned yesterday, Jason has put together a seven day online training course called ‘Trade Secrets’. In it he reveals some of his best trading tips…and shares five well-kept trade secrets he’s used with great success himself.

The course began on Monday, but it’s not too late to join in. You’ll just have a bit of catching up to do.

‘Trade Secrets’ is free to all of our paying subscribers. If you’d like to join in, just click here to sign up.

And now a bit of reader mail…

In the mailbag

We received a fair bit of reader mail following my unorthodox take on Donald Trump’s performance with Vladimir Putin in yesterday’s Port Phillip Insider.

If you missed that, you can review it on our website.

And if you missed the press conference between Putin and Trump, you can catch that on YouTube. I highly recommend watching for yourself rather than letting the mainstream media interpret the summit for you.

Because, as highlighted yesterday, the mainstream media appear to be hip deep in the pockets of the Deep State. Meaning they look intent on preventing any kind of reconciliation between Russia and the West. And they’re more than happy to throw Trump under the bus in the process.

This first email comes from reader Gene, who appears to have ploughed right through the sarcasm woven through my analysis yesterday:

FFS!!!! Will you people please stop knocking Donald Trump!!!

You’re beginning to remind me of those whining snowflake libtards that cannot do anything but knock him.

Cut it out. Keep your personal political opinions out of your newsletters PLEASE!!!! Some of us happen to like the guy.’

I’ll let you decipher Gene’s opening acronym for yourselves.

As for the rest of the email, Gene, I hope you read the investment newsletters you subscribe to more carefully than you did yesterday’s article here! Have another read…this time all the way to the end. If it helps, maybe place your tongue firmly in your cheek while you’re reading to get into the spirit of things.

This next letter comes from reader Alan:

Good evening,

I have just finished reading the Biography of General Sir John Monash by Professor Roland Perry and can’t help thinking the backlash over Trump’s meeting in Helsinki with Putin has all the hallmarks of the protestations of journalists Bean and Murdoch in their endeavour to block Monash’s promotion to commander of the AIF in Europe in 1918. Backward thinking at its worst and we all know what Monash achieved by not listening to the backward thinkers.

Trump may not be a Monash but he is on the right track when it comes to getting along with Russia. My limited knowledge of US politics has me thinking what a dangerous place America is politically today with the prominence of Zealots on both sides of the fence….and powerful forces endeavouring to protect their interests. 

The so called experts were wrong in 1918 and I suspect they have it wrong today.

Kind regards

Thanks Alan. That’s one more book I’ll place on my ever growing ‘must read’ list.

While Monash might be a bit offended by the comparison, backwards thinkers do appear to have the loudest barks at the moment. Let’s hope wiser heads prevail.

Feel free to write in to letters@portphillipinsider.com.au with any thoughts or feedback of your own. If we publish your letter, we’ll only use your first name.

Finally, here’s the latest on government intrusion from The Australian Tribune:

‘New South Wales’ Dangerous Move on Doctor–Patient Confidentiality’

One of the most important relationships you’ll ever have is with your doctor. As with every important relationship, mutual trust is vital to its continuing success.

Without trust in iron clad doctor–patient confidentiality you might well decide to withhold certain health information from your doctor. Like whether you smoke cigarettes, exercise regularly…or use drugs.

Patients in New South Wales may soon get a rude…’

If you’re fed up with sanitised, politically correct dogma cut and pasted from one mainstream source to another then The Australian Tribune is for you.

And it’s absolutely free.

Sign up here to get The Australian Tribune delivered free to your inbox five days per week.

You can visit our website at https://www.theaustraliantribune.com.au/ to read the complete article above now.

Cheers,
Bernd