Just the introduction... Will post complete thesis later
THE 2018 MARIJUANA MANIA THESIS
THE MECHANISTICS OF A MANIA
The cryptocurrency craze. The Nasdaq internet sector supernova. Cabbage Patch Kids. Elvis.
Manias are periods of time marked by outlandishly gargantuan growth spurts in the perceived value of a bitcoin, a stock, a doll, a rockstar. They are captivating to observe and thrilling to experience. This is where boredom goes to die. Dopamine.
In the stock market world, manias tend to occur most frequently in novel and revolutionary industries possessing the potential for gigantic growth rates, stratospheric ceilings and global dissemination.
An equity sector mania is marked by a tremendous surge in buying interest coupled with an unusually low selling interest. Demand overwhelms supply and stock prices escalate rapidly as many investors recognize the potential for enormous returns, and as a result, hold for far bigger profits than usual. This “strong hands” mentality serves to further decrease the freely tradable shares or “float” of a stock and amplifies the strength of the upward movement in price. As the demand for shares continues to increase over time with rising numbers of incoming investors, the concomitant dwindling of the available supply serves to significantly heighten the value of the stock. In such an environment, sentiment becomes the primary driver of stock price as traditional valuation metrics like market capitalization are rendered essentially irrelevant. In a true cannabis mania, returns of several thousand percent are readily achievable if one owns the right portfolio of stocks.
The OTC marijuana sector is certainly no stranger to manias, which seem to have a predilection for even calendar years – 2014 and 2016 representing the two most recent occurrences.
The marijuana sector mania cycle resembles a hybrid of the euphoric elevator ride and deflating crash of the 1999-2000 internet stock bubble mixed with the cycling nature of a catalyst-driven craze with an uncertain future like bitcoin.
THE 12 STAGES OF THE MJ SECTOR MANIA CYCLE
Manic Mania
Strong Mania
Mediocre Mania
Hot
Warm
Lukewarm
Cool – CURRENT STAGE
Cold
Icy
Colorado Bear
Canada Bear
Polar Bear
Sleek
