Originally posted September 9, 2019 on Profit Trends
Few people cheer for the bears… especially if you’re from Green Bay.
But during the past century of trading, investors have been hit with more than 30 bear markets.
Pot stock investors in particular have endured several bear markets already. And we’ve been slogging through the longest one in the sector’s nascent history.
But if those bears start to point to a pattern we can profit from, that might be something worth cheering for…
Since March 2017, the North American Marijuana Index is up 26.3%.
That’s not bad… but it’s not great either.
That means pot stocks have returned roughly the same as the Dow Jones Industrial Average and the S&P 500 over those 2 1/2 years. And the index trails the Nasdaq by essentially a dozen percentage points since March 2017.
Looking at this chart, we see that the sector has been pummeled by five bear markets since March 2017.
But, importantly, a pattern is starting to emerge. Let me show you:
April 10, 2017, to August 22, 2017: The North American Marijuana Index fell 31.82%. January 8, 2018, to April 9, 2018: Pot stocks fell 39.2%. June 21, 2018, to August 14, 2018: The North American cannabis benchmark lost 27.53%. October 15, 2018, to December 21, 2018: The index tumbled 46.49%. March 21, 2019, to August 27, 2019: The North American Marijuana Index shed 40.1%.
So, of those five bear markets (including the one we’re currently in), the index hit lows in August three times.
Now, anybody who deals with data will tell you a list of only five data points isn’t going to cut it. It’s not definitive.
But I do find it interesting that we are starting to see