If you want to see visually how the progression has taken place of vehicle production by country, check out this video.
Top 17 Psilocybin Magic Mushroom Stocks & Other Psychedelic Stocks
by Fred Fuld III
It was one year ago at the San Francisco MoneyShow that I gave a speech called Stocks of Leading Future Industries. In that presentation on August 16, 2019, I covered seven leading industries, plus one bonus industry.
The bonus industry was Legalized Hallucinogenic Drugs, primarily the legalization of psilocybin and the industry around its use for therapeutic purposes.
First Public Psilocybin Stock
At that time, there was only one publicly traded stock involved in researching psilocybin, Wuhan General (WUHN), which had a division, M2BIO, that was exploring the medical use of psilocybin for treatments of various conditions.
I didn’t recommend the stock during the speech, (I never make any recommendations, I only come up with suggestions for you to research), but I did say that one of these days, this stock will start to move up, other psilocybin companies will go public, and these stocks could take off just like the cannabis stocks did in the past. I told the audience to watch this stock and the industry. You can see my speech below. The section on the psilocybin and psychedelic pharmaceutical industry is at the 25 minute mark.
If you want to see a pdf of the slides from the presentation, you can go HERE.
The Alert About Psychedelic Stocks
So why was it important to keep an eye on this stock? From November 20, 2019 to May 20, 2020, the stock traded between 2 cents a share to 4 cents a share. The next day, the stock almost doubled to 7 cents a share. It then traded at 8 cents a share for a couple days, and jumped by 50% to 12 cents a share the next day. After that, it really started to move.
So there were exactly six months that you could have picked up the stock for, let’s say, 3 cents a share, halfway between the trading range. The stock closed at 33 cents on Friday (actually 32.75 cents but I rounded to make the calculation easier).
This works out to a 1,000% profit on Wuhan. In other words, if you had invested $5,000 at 3 cents per share, the shareholdings would now be worth $50,000. Actually the stock has even traded above 42 cents since May.
The movement of the shares should have been an alert to investors and traders.
Why the Potential for the Psychedelic Drug Industry
In my presentation, I discussed how extensive research is being done with health treatment studies on the use of psilocybin to treat:
•Anxiety disorders
•Major depression
•Addictions
•Drug dependence
•Mood disorders
•Treatment Resistant Depression
•OCD
•PTSD
I also mentioned that psilocybin and magic mushrooms have been decriminalized or legalized in:
–Denver, Colorado (May 2019)
–Oakland, California (June 2019)
–Austria (possession decriminalized 2016)
–Brazil
–Iceland (fresh mushrooms only)
–Jamaica
–Netherlands (legal as truffle)
–Portugal (decriminalized)
–Samoa
–Spain (decriminalized for personal use)
–Vietnam
Since then, Santa Cruz has decriminalized psilocybin in January of this year.
Is There a Precedent for Using Hallucinogenic Drugs Medically?
There have actually been examples of hallucinogenic drugs being used for medical purposes. One example is Lorcaserin [BELVIQ], which is a hallucinogen, but has been marketed for weight loss in very low doses. The Schedule I hallucinogen psilocybin has the same mechanism of action as Lorcaserin, according to the U. S. Government National Institute of Health. Arena (ARNA) markets the drug in the U.S. and South Korea, and Eisai Co Ltd (ESALY) manufactures and distributes the drug.
Another example is Spravato, which is a derivative of the psychedelic ketamine, and is being used for depression. It is produced by Johnson & Johnson (JNJ).
What’s Happening Now with Psychedelic Drugs and Stocks
On Friday, September 18, 2020, Compass Pathways (CMPS) went public, trading on the NASDAQ. The company’s IPO was priced at $17 per share, up from a range of $14 to $16, due to the huge demand.
Once it started trading it skyrocketed to $29 a share, an increase of over 70%, and putting the market cap at almost a billion dollars.
The company, which is based in England, is doing therapeutic research on the use of psilocybin for depression.
There are now over a dozen stocks involved in the psilocybin and psychedelic drug industry. To see a list of these stocks, click HERE.
Maybe some of these stocks will get higher and higher.
Disclosure: Author owns a very small amount of CMPS (less than 10 shares) at the time the article was written.
Investment Books Recommended by Warren Buffett
Warren Buffett, head of Berkshire Hathaway (BRKA) (BRKB), really came out with a list of books that he recommends on how to invest.
At last year’s Berkshire Hathaway annual meeting, Buffett actually provided such a list. The books he recommended about himself can be found here and here.
However, if you are interested in reading books about how to invest, that are recommended by Warren Buffett, they can be found on the list below:
Business Adventures Twelve Classic Tales from the World of Wall Street
Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition
Investing Between the Lines: How to Make Smarter Decisions By Decoding CEO Communications
Happy Reading!
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Top Restaurant Short Squeeze Stocks
by Fred Fuld III
Many restaurant stocks have taken a hit over the last six months, with some dropping by more than 50%. Several of these stocks are heavily shorted, creating short squeeze opportunities. When stocks rise quickly in price for whatever reason, short sellers scramble to cover their positions by buying shares, and causing the price of the stocks to increase even more.
Traders and investors can make money on the long side from short squeezes. One technique that stock traders utilize is buying short squeeze stocks, in other words, companies have been heavily shorted. Here is a more extensive explanation of short squeezes.
When you short a stock, it means that your goal is to make money from a drop in the price of a stock. Technically, what happens is that you borrow shares of a stock, sell those shares, then buy back those shares at a hopefully lower price so that those shares can be returned. This all happens electronically, so you don’t actually see all the borrowing and returning of shares; it just shows up on your screen as a negative number of shares.
Short selling can be profitable, but sometimes when the stock moves against the short sellers, and begins to rise, the short sellers jump in right away to buy shares to cover their positions, creating what is called a short squeeze. When a short squeeze takes place, it can cause the share prices to increase fast and furiously. Any good news can trigger the short squeeze.
Some traders utilize this situation by looking for stocks to buy that may have a potential short squeeze. Here is what a short squeeze trader should take into consideration:
Short Percentage of Float ~ The float is the number of freely tradable shares and the short percentage is the number of shares held short divided by the float. Amounts over 10% to 20% are considered high and potential short squeeze plays.
Short Ratio / Days to Cover / Short Interest Ratio -This is probably the most important metric when looking for short squeeze trades, no matter what you call it. This is the number of days it would take the short sellers to cover their position based on the average daily volume of shares traded. This is a significant ratio as it shows how “stuck” the short sellers are when they want to buy in their shares without driving up the price too much. Unfortunately for the shortsellers, the longer the number of days to cover, the bigger and longer the squeeze.
Short Percentage Increase ~ This is the percentage increase in in the number of short sellers from the previous month.
Here is one example from the list below. Shake Shack(SHAK) is a stock that is heavily shorted. As a matter of fact, 26% of the float is shorted. (The float is the number of shares of the company that are freely tradeable.) Plus, the number of shares shorted has increased by 4% over last month. It also has a days-to-cover ratio of 5.7, which means that it would take almost six days for the short sellers to cover their position, based on the average daily volume.
So what stocks are heavily shorted that may be worth a closer examination? Check out the following list, but be aware, that often some stocks are heavily shorted for a reason. All these stocks have significant short metrics.
Possibly a short squeeze will cause a few of these to fly higher.
| Stock | Symbol | % of Float | Days to Cover |
| Shake Shack | SHAK | 26% | 5.7 |
| Dave & Buster’s | PLAY | 33% | 1.8 |
| Red Robin | RRGB | 35% | 3.4 |
| El Pollo Loco | LOCO | 19% | 11.2 |
Disclosure: Author didn’t own any of the above at the time the article was written.
How to Speculate on the Results of the Presidential Election
by Fred Fuld III
If you have been wondering what the percentage chance of a particular candidate winning an election, there is a website you can check out.
It shows the betting odds for the U.S. presidential election and the odds for the Senate control and the House control, based on the oddsmakers.
The site is called Election Betting Odds. Unfortunately (or maybe fortunately?) for Americans, there are laws prohibiting betting on political elections in the United State (with one exception which will be described later in this article).
The Election Betting Odds site is based primarily on Betfair.com, the major betting site based in the UK, along with other sources. Americans are not allowed to bet on this site.
However, if you are a U.S. citizen and you really want to speculate on the outcome of the upcoming elections, you can use a site called PredictIt.org. Why is there this loophole?
Well first, Predictit.org is an experimental project operated for academic purposes at New Zealand’s Victoria University under permission from the CFTC, the Commodities Futures Trading Commission.
Second, the maximum you can “invest” is only $850, so there is not a huge risk to traders if they lose. Bid amounts range from one penny to 99 cents.
The interesting feature about PredictIt is that there are numerous politically related possibilities that you can speculate on, not just the presidential election.
Here are just a few of the things you can bet on:
- Which party will win Florida in 2020?
- Will Nancy Pelosi become Acting U.S. President on January 20?
- Who will win the 2020 New Hampshire Democratic gubernatorial primary?
- Will Trump resign during his first term?
- Who will be the next justice to leave the Supreme Court?
- Will a federal charge against Rudy Giuliani be confirmed by Dec. 31, 2020?
- Will Kim Jong-Un be Supreme Leader of North Korea on Dec. 31?
- Will Benjamin Netanyahu be prime minister of Israel on Dec. 31, 2020?
- Will Scottish Parliament call for an independence referendum in 2020?
- Will NASA find 2020’s global average temperature highest on record?
I found it fascinating just to browse through to see all the different things that people are speculating on.
The Stock market will be Closed on Labor Day and These Other Days
In case you were wondering, the New York Stock Exchange and NASDAQ will be closed on Labor Day, Monday, September 7, 2020.
These markets will also be closed these following days:
- Thanksgiving Day, Thursday, November 26, 2020
- Christmas Day, Friday, December 25, 2020
- New Years Day, Friday, January 1, 2021
In addition:
The stock market will close early at 1:00 p.m. ET (1:15 p.m. for eligible options) 10:00 a.m PT on Friday, November 27, 2020.
The stock market will close early at 1:00 p.m. ET (1:15 p.m. for eligible options) 10:00 a.m PT on Thursday, December 24, 2020.
Which Politicians Are Your Friends and Family Donating Money To?
As we approach the presidential election, money is starting to flow to campaigns.
Have you ever wondered who your friends really support? How about your family members?
The best way to tell who someone really supports is to follow the money.
Here is how you can find out what politicians they have donated too. The Federal Election Commission actually posts this information on their website. All you need to do is enter the name of the Contributor and the Zip Code, adjust the date range, scroll down and see the results.
To test it out, enter your mayor or city council members.
Click the following link to do your search:
Federal Election Commission Donor Search
Changes to the Dow Jones Industrial Average
Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term
by Fred Fuld III
When I first got the book Winning Now, Winning Later: How Companies Can Succeed in the Short Term While Investing for the Long Term, the first thing that caught my eye was the list of successful people who gave it endorsements, including Bob Iger, Executive Chairman of Disney, Hank Paulson, former U.S. Secretary of the Treasury, Marc Benioff, Co-CEO of Salesforce, and Indra Nooyi, former CEO of PepsiCo.
The author, David M. Cote, was the CEO behind the enormous success of Honeywell. He covers, in great detail, the process for successfully achieving both short-term goals and long-term goals for your company. Every chapter has a summary at the end called Questions to Ask yourself.
The book includes many informative and sometimes amusing anecdotes, which help to explain his process for business success for both a short term and long term basis.
I found Chapter 4 Focus on Process, to be the most important. It explains how it is imperative to get employees involved in improving company processes, and the utilization of phases to improve success.
Whether you are the head of a large publicly traded corporation, the CEO of a mid-size business, or managing a fast growing startup, I recommend that you read Winning Now, Winning Later as you will find extensive advice and information that will help your organization.
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Coffee May Benefit You and Your Portfolio
by Nkem Iregbulem
Many people drink coffee first thing in the morning. Some heavily rely on this dose of caffeine to boost their energy and start their day. Turns out that in addition to its energy-boosting powers, coffee may be associated with more health benefits than we once thought. Recent studies have highlighted different reasons why coffee may be good for us.
A cohort study published in the Current Developments in Nutrition journal this past May investigated the association between coffee consumption and mortality rates. The participants of the study were 36,758 US adults ages 20+ years who participated in the National Health and Nutrition Examination Survey (NHANES) from 1999 to 2014. Researchers found that drinking 1 to 2 cups of coffee a day was significantly associated with a reduced risk of heart disease mortality. Additionally, they found that participants who consumed 1 or more cups of coffee a day had a lower risk of all-cause mortality.
Recent studies have also studied the potential health benefits of caffeine, a key component of coffee. A meta-analysis published in Nutrients this past June explored the effect of caffeine on the risk and progression of Parkinson’s disease (PD). Nine different studies were included in the healthy cohort, and four were included in the PD cohort. Researchers observed a significant deceleration in the progression of motor symptoms in patients with PD. They also found that caffeine consumption among healthy individuals was associated with a lower risk of developing PD.
These potential health benefits may also compel you to invest in some coffee-related companies. Your options include Starbucks (SBUX), Coffee Holding (JVA), Farmer Brothers Co. (FARM), Spot Coffee (SPP), and Youngevity International Inc. (YGYI). All of these stocks are traded on NASDAQ except SPP, which is traded on the TSX Venture Exchange — previously known as the Canadian Venture Exchange.
Your first option is Starbucks (SBUX), the largest coffeehouse chain in the world. The company has over 31,000 stores around the world that sell coffee, tea, blended drinks, sandwiches, pastries, and many other food and drink items. The global coffee powerhouse was founded in 1971 and is based in Seattle, Washington. Starbucks has a market cap of $90.09 billion and pays a dividend yield of 2.13%. With a high price-to-sales ratio of 3.81 and a price-to-book ratio of 71.29, its stock trades at 28.25 times forward earnings. The company enjoys a 3-year revenue growth rate of 7.54% and an even better 5-year revenue growth rate of 10.02%. Starbucks has managed to increase its revenue each fiscal year over the past decade.
You might also consider investing in Coffee Holding (JVA), a company that makes, roasts, packages, markets, and distributes roasted and blended coffee for private labeled accounts and its own brands. Its products can be divided into three product categories: wholesale green coffee, branded coffee, and private label coffee. The company was founded in 1971 and is currently headquartered in Staten Island, New York. Coffee Holding has a market cap of $18.1 million and does not pay a dividend. Its stock has an excellent price-to-sales ratio of 0.22 and a price-to-book ratio of 0.71. As of its most recent quarter, Coffee Holding has $2.65 million in total cash and $7.6 million in total debt. The company has a 3-year revenue growth rate 3.08% but a negative 5-year revenue growth rate of -4.50%.
Another option is Farmer Brothers Company (FARM), a coffee foodservice company that makes, wholesales, and distributes coffee, tea, and hundreds of other foodservice items to retailers and foodservice providers. Its customers include hotels, offices, restaurants, convenience stores, and other establishments. Founded in 1912 and based in Northlake, Texas, Farmer Brothers Company has a market cap of $123.08 million and does not pay a dividend. The stock has an excellent price-to-sales ratio of 0.22 and a price-to-book ratio of 0.83. As of its most recent quarter, Farmer Bros has $26.39 million in total cash and $105.91 million in total debt. The company enjoys a 3-year revenue growth rate of 3.06% and a 5-year revenue growth rate of 2.44%.
Spot Coffee (SPP) is a Canadian company that designs, builds, and operates coffee cafés throughout Canada and the United States. These cafés sell coffee, sandwiches, pastries, salads, and many other food and drink items. Most of the company’s revenue comes from sales at these cafés, licensing and franchise fees, and the wholesale of roasted coffee beans. Founded in 1996 and headquartered in Buffalo, New York, Spot Coffee has a market cap of $4.71 million and pays a dividend yield of 3.07%. Its stock has an excellent price-to-sales ratio of 0.53. As of its most recent quarter, the company has $6.89 million in total debt. Spot Coffee has a negative 3-year revenue growth rate of -4.22% but a better 5-year revenue growth rate of 1.44%.
Finally, you might consider Youngevity International Inc. (YGYI), a company that develops and distributes nutritional products and commercial coffee. It operates in two segments, Direct Selling and Commercial Coffee, but generates most of its revenue from the Direct Selling segment. It offers a wide variety of products including gourmet coffee, skincare and cosmetic products, nutritional supplements, sports and energy drinks, fashion accessories, digital products, and organic food. Youngevity was founded in 1996 and is based in Chula Vista, California. The company has a market cap of $24.26 million and does not pay a dividend. The stock has an excellent price-to-sales ratio of 0.13 and has a price-to-book ratio of 0.43. As of its most recent quarter, Youngevity has $7.27 million in total cash and $24.42 million in total debt. The company enjoys a 3-year revenue growth rate of 1.23% and a much better 5-year revenue growth rate of 13.66%.
Maybe a coffee stock will wake up your portfolio.
Disclosure: Author did not own any of the above stocks at the time the article was written.