EC Time To Buy Weed Stocks?

“When we work backward from results to figure out why those things happened, we are susceptible to a variety of cognitive traps, like assuming causation when there is only a correlation, or cherry-picking data to confirm the narrative we prefer. We will pound a lot of square pegs into round holes to maintain the illusion of a tight relationship between our outcomes and our decisions. ~ Annie Duke, “Thinking in Bets”

In this week’s Dirty Dozen [CHART PACK] we look at structural headwinds to inflation, go through some market indicators suggesting more chop and vol ahead, then dive into a number of great charts, setups, and finally end with a profitable high growth cannabis company with great technicals…

Let’s dive in. 

***click charts to enlarge*** 

  1. “In past cycles, 1994, 2004, and 2011 were comparable years. We think that 2021 will be similar for investors – flattish returns for the year with a 10-20%+ correction along the way. During such periods, the game is to be more selective with one’s investments and even more tactical with the rotations under the surface… Finally, remember that we’re still only a year from the trough in the recession, and new bull markets tend to last for years. So, whatever correction the market experiences this year, we are likely to make higher highs next year.” via MS.

(Click on image to enlarge)

  1. “It’s hard even to imagine a wage-spiral tail risk. It would take steady wage gains of 10-12% to push inflation to the levels of the 1970s & 80s, and the US economy is structured very differently today. Non-elite unions are politically toothless. Technology penetrates every industry. The offshoring of more services is coming.” via BofA. 

I agree with this take in regards to stickier secular inflation though I believe cyclical inflation will be more persistent than many are expecting. 

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Disclaimer: All statements are solely opinions and are for educational purposes only.

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William K. 4 weeks ago Member's comment

An interesting discussion as to the effects of emotions on pricing and trading. The tags fear and complacency are interesting alternatives to greed and panic and the stampede syndrome It was not always clear about the meanings of all of the graphs, but that is OK. Plots of the outputs of proprietary algorithms are not always obvious in their meanings, but that is OK.

Jacob Paterson 4 weeks ago Member's comment

Exactly right.