5 Marijuana ETFs You Can Invest In Today

Posted on by Matt Thalman

Until April Exchange Traded Fund investors only had one legitimate option, the ETFMG Alternative Harvest ETF (MJ), if they wanted to invest in the marijuana industry. But in April the AdvisoreShares Pure Cannabis ETF (YOLO) began trading. Then in July, the industry saw a marijuana boom when three new ETFs focused on the controversial industry began trading. On July 9th The Cannabis ETF (THCX) began trading, then the 23rd saw the Amplify Seymour Cannabis ETF (CNBS) begin trading and finally on the 25th the Cambria Cannabis ETF (TOKE) opened for business.

Before we get into the differences of each ETF, I wanted to let everyone know that for the most part, all five of these ETFs are rather easy to buy. In the past when I have written about the marijuana ETFs, I often mentioned the Horizons Marijuana Life Sciences Index ETF (HMMJ) which is actually traded on the Toronto Stock Exchange. Thus for U.S. investors, it can be difficult to purchase this fund unless you have an account which allows trading on foreign exchanges and in my experience, most retail investors don’t have those types of accounts.

I know these five are all easy to buy because I actually bought all five of them. I have two different brokerage accounts, one with Merrill Lynch and one with TD Ameritrade. The TD account allowed me to purchase all five ETFs with absolutely no issues and the Merrill Lynch account allowed me to buy MJ no problem. However, the Merrill Lynch account required that I call in and have a Merrill Lynch representative assist with the purchase of YOLO, THCX, CNBS, and TOKE, but not because they were marijuana ETFs but because they were thinly traded or had small asset bases.

So, let’s take a look at the five US listed marijuana ETFs and see what makes them different. Continue reading "5 Marijuana ETFs You Can Invest In Today" →

The Fed's Tower Of Babel

Posted on by George Yacik

There was a profusion of communications and opinions from the Federal Reserve last week. The challenge now is to try to make sense of it all.

The first thing that caught my attention was the release of a survey conducted by the New York Fed measuring how well the Fed communicates its intentions to market makers. It didn’t do so well.

The bank found that a majority, or 15 out of 24, of the primary dealer banks that bid on U.S. Treasury debt auctions and make a market in government securities found the Fed’s communications prior to its July 31 decision to lower interest rates to be “ineffective” or close to it. “Several dealers indicated that they found communication confusing, and several characterized communications from various Fed officials as inconsistent,” the New York Fed said.

A similar survey of money managers found only slightly better results, with exactly half, or 14 of 28, giving the Fed “low grades for communications effectiveness.”

Then, at the Kansas City Fed’s annual “symposium” in Jackson Hole, Wyoming, Athanasios Orphanides, a professor at MIT, released a paper including suggestions on how the Fed can improve how it communicates its policy-making process. While the paper commends the Fed for increasing the amount of information it provides to the public over the past three decades – it surely has – there’s room for improvement in how it communicates that information. Specifically, Orphanides recommended that Fed members provide more details about their confidence or uncertainty in their various economic projections and how those might change given different scenarios or over time.

While all of the information the Fed already provides, and the prospect of more, is good in theory, the problem is that the Fed is providing too much information, which is creating more confusion and uncertainty, rather than less, about exactly where it stands collectively, while businesses, investors and consumers crave simple guidance on the direction of future Fed policy so they can make more intelligent decisions. Continue reading "The Fed's Tower Of Babel" →

Stock Buybacks May Be Slowing, But Still At Record Levels

Posted on by Matt Thalman

Stock buybacks are off their 2018 pace when corporate America spent over $800 billion in share repurchases, but they are still high based on historical figures. One estimate, based on where share buybacks have been during the first two-quarters of 2019 point to companies spending roughly $740 billion in 2019 on share repurchase. For comparison, in 2017 companies spent $519 billion, in 2016 there was $536 billion spent, and in 2015 $572 billion was spent rebuying shares.

There are several reasons share buybacks are hitting even lofty levels than in the past. One is the tax cuts that went into effect last year, another being the fact that we are now in the tenth year of a bull market. At this point in a market cycle, there is a combination of company management teams not wanting to make large capital expenditures and not having any large projects they feel are worth spending money on.

Typically, we see large expenditures taking place during the first few years of a bull market, or shortly after a recession has come to an end because this is when new opportunities present themselves to companies for many different reasons. It could be because that is when capital is cheap due to low-interest rates, weaker businesses are struggling from the recession, so the price to purchase them is low, and or there are ‘fire’ sales as the remains companies that failed during the recession are sold off piece by piece.

Regardless of the reasons why corporate America has decided this is the time to buy-back stock, the fact remains record amounts of money are being spent. The benefits of stock buybacks are highly debated, but one thing is for sure, and that’s when companies spend money on stock buybacks, their earnings per share figures usually look better, even if the business itself isn’t growing. This is because when you have fewer pieces of the pie to split, each piece of the pie gets a little bigger. So, even if we are headed towards a recession, buying companies that are purchasing large amounts of their stock will keep their earnings per share figures somewhat healthy in the short run. So, let’s take a look at a few different ETFs that focus on companies who are buying back their stock. Continue reading "Stock Buybacks May Be Slowing, But Still At Record Levels" →

Weekly Futures Recap With Mike Seery

Posted on by Mike Seery

Gold Futures

Gold futures in the December contract settled last Friday in New York at 1,523 while currently trading at 1,537 up nearly $28 for the week ending on a positive note all because it certainly looks like a trade war with China is going to escalate.

I am currently not involved in gold, but I do think higher prices are ahead and if you are long a futures contract continue to place the stop loss under the 2 week low standing at 1,488 as an exit strategy as I still think prices break the 1,600 level possibly in next week's trade. I have a bullish silver trade which continues to move higher weekly as I see no reason to be short the precious metals as the U.S. stock market is down another 450 points as the commodity markets remain weak across the board especially the agricultural sector.

Volatility in gold is exceptionally high, and that will continue for the rest of 2019 as prices are still trading above their 20 and 100-day moving average, however for the bullish momentum to continue prices have to break the April 13th contract high of 1,546, and I think that situation is going to occur so stay long if you are involved as I see no reason to take profits.

TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: HIGH
Continue reading "Weekly Futures Recap With Mike Seery" →