A Closer Look At Marijuana Stocks With Alan Brochstein

Institutional investors couldn’t touch these cause they were penny stocks. Because of federal laws, these companies couldn’t go to banks to get loans, they couldn’t IPO with Morgan Stanley, so you do have a chance if you spend time to find the better companies in the space. The valuations have gotten so high that it makes sense for companies to become public. They typically become public through reverse merger. But there’s a NASDAQ IPO that’s going to blow everyone away. Brochstein could not comment further on what this particular IPO would be. Related: The ‘Green Rush’ Is Bringing Traders New And Old Into To The Fold Of Marijuana Stocks Brochstein estimated at the beginning of 2014 that there were about 75,000-100,000 people invested in marijuana stocks. He expects this number to quickly multiply — so much so, that he has created the Marketfy 420 Investor Cannabis Stock Index. People are going to be able to see how these stocks have been performing in the last year; they’re up 8X, but nobody has seen that. Benzinga asked if the current fervor has created a bubble, perhaps with the public is entering into the sector as the bubble is about to burst. We’re definitely not at the tail end, but they could be paying too much. Now were starting to see what are the guys buying today, buy it up, then jump to the next stock. We’re seeing rotation. With respect to his experiences calling tops in bubbles, Brochstein said I was shorting in late 1998 early 1999.
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