Introduction 

Psilocybin, the primary psychoactive ingredients in “magic mushrooms”, is the most widely-researched psychedelic substance today (go here for the 8 other psychedelic substances being studied) due to its effectiveness in generating new neural pathways that allow different regions within the brain to communicate in new and more effective ways.

The main public companies involved in psilocybin research are:

1. Atai Life Sciences N.V. (ATAI), with a market capitalization of $980M, is backing multiple ketamine-related ventures and is focused on treatment for treatment resistant depression (TRD), anorexia and post-traumatic stress disorder (PTSD) and has a synthetic psilocybin formulation in Phase 3 trials for TRD.
2. Compass Pathways plc (CMPS), with a market capitalization of $493M, is focusing on treatments for treatment resistant depression (TRD), anorexia and post-traumatic stress disorder (PTSD) and has a synthetic psilocybin formulation in Phase 3 trials for TRD.
3. Mind Medicine (MindMed) Inc. (MNMD), with a market capitalization of $702M, is focusing on treatments for anxiety, depression and ADHD, and has a psilocybin analog in Phase 2 trials

CMPS jumped 16.3% last week. Here's why:

1. Explosive Analyst Price Targets: The 6 analysts that cover Compass Pathways stock reiterated their  consensus rating of "Strong Buy" and an average price target which forecast a 230% increase in the stock price over the next year and this kind of consensus across top-tier analysts triggered speculative buying and momentum trading.
2. Technical Breakout: CMPS stock had stagnated in July and August, and the analyst optimistic price targets triggered a technical breakout.
3. Short Covering: Short interest was relatively high so the rally likely included short covering which amplified the move.

Pure-Play Psychedelic-Compound Based Stocks Portfolio 

Below is how the "Big Four" constituents in our Portfolio performed last week, in descending order, and YTD, their market capitalizations and a chart of the performance of the portfolio by various time periods:

1. Compass Pathways (CMPS): up 16.3% last week; up 36.0% YTD
   • Market Capitalization: $493M 
2. GH Resources (GHRS): up 4.4% last week; up 101.3% YTD
   • Market Capitalization: $874M
3. Mind Medicine (MindMed): up 3.8% last week; up 37.6% YTD
   • Market Capitalization: $702M
4. Atai Life Sciences (ATAI): No Change last week; up 243.6% YTD
   • Market Capitalization: $980M

Summary: The Portfolio was up 5.3% last week and is now up 66.8% YTD

The above portfolio chart has been generated using the tools provided by PortfoliosLab.com and easy step-by-step instructions are available here to help you create a chart of your own portfolio or that of a client. It's easy, fast and free.

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