Investing in the new Cannabis Market

The loosening of restrictions on the sale and consumption of marijuana have opened up a lot of opportunity for a host of companies.  With Colorado and Washington State legalizing marijuana for recreational use it is only a matter of time before other states do the same. There were established players already in the market but some companies who operate on the fringe are seeing a surge in their stock price as well. 

Here are some companies that one of my students recommended to me.

• Grow Life: PHOT
• Advanced Cannabis Solutions: CANN
• Vapor corp: VPCO

Grow Life: PHOT

"Growlife, Inc., through its subsidiaries, manufactures and markets horticulture and lifestyle products in the United States and internationally. It offers LED lights for indoor growing; wireless monitoring and control equipment to operate grow room functions; and plant growing systems and accessories, including nutrients, media, timers, controls, and automated water accessories." - Yahoo Finance

Advanced Cannabis Solutions: CANN

"Promap Corporation develops, owns, and lease growing facilities to licensed marijuana growers and dispensary owners for their operations. The company was incorporated in 2013 and is based in Colorado Springs, Colorado" - Yahoo Finance

Vapor corp: VPCO

"Vapor Corp. designs, markets, and distributes electronic cigarettes, vaporizers, e-liquids, and accessories primarily in the United States and Canada. The company’s electronic cigarettes are battery-powered products that enable users to inhale nicotine vapor without smoke, tar, ash, or carbon monoxide" - Yahoo Finance

Alternative Strategy With The VIX

Alternative strategy time... if you buy the VIX (volatility index) on dips some jittery news event always makes it jump up at least 2 points. If you look at the yearly chart and check the days where it spiked you will see some big news event happened on that day (try it just type in the day on google). Also Fridays and Mondays are big days for the VIX. Sell on volume and you have a consistent cash generator.

Dollar Cost Averaging Plan

I had another conversation with a friend of mine about dollar cost averaging.  He uses it as an overall strategy to build his investments.  He combines it with Fibonacci retracements and moving averages to refine his trades.  I think this is a great plan and would add that if you want a solid overall plan, only buy stocks that pay a dividend and you will be paid to own the stocks as well.

Here is a great video from Investopedia on dollar cost averaging:

http://www.investopedia.com/video/play/dollar-cost-averaging/

Real Estate versus the Stock Market

I was recently in a debate about which investment vehicle is the best one to invest in.  More specifically I made the comment that real estate is the "fastest" way for people to become wealthy.  I said this because no bank will ever give you a loan to buy stocks, however they will gladly give you a loan to buy a property.  This key difference is why you are able to make money faster through real estate, you are leveraging the bank's money to get more valuable assets.  Buying stocks overtime will make you wealthy but buying a valuable property at a low price gives you instant equity. 

There are ways of building your wealth through dollar cost averaging and buying stocks over time, but real estate in my opinion is the fastest way to wealth.  There is one caveat here, buying stock options might be a faster way to gaining wealth.  I however don't recommend everyone buy options and try to build wealth that way.  There is more risk in buying options because you are not buying the underlying asset.  You are buying an opportunity to buy something.  You can however leverage your money in a greater way through options trading which will generate larger amounts faster.  That said I do not think the everyone should use this as a vehicle.  I think if you are dedicated to learning about it and doing the research then by all means see if you can master it, but it takes skill and a lot of research.

In essence buying properties at a discount, fixing them up to gain equity and renting them out, is a great way to build wealth quickly, and if you supplement it with buying dividend paying stocks using dollar cost averaging then you are well on your way to financial freedom.

Good time to buy ARR

I've been having a conversation with a couple other investors and we've been debating the merits of ARR.  I recommended them looking at it as a great way to earn monthly dividends.  One of them said that the income statement didn't look good enough for him.  I told him to check out the balance sheet and see their assets.  They have a large amount of equity even though they had a loss for 2013.  Also if you see board members buying up their own stock then you know there is something good happening.  This article confirms my thoughts:

http://seekingalpha.com/article/2081833-armour-continues-buybacks-in-a-big-way-for-investors?source=yahoo