Gold vs Crypto vs Cannabis - Best Stocks to Invest In 2018
By June 1, 2018– Published in on
As a veteran investor and billionaire Jim Rogers says, it has never been easy to make money.
Contrarian investing can be very profitable, but it is vital to make sure the asset class you are investing in isn't cheap for all the right reasons. There are many investments out there which simply aren't going to create returns, and should be avoided.
Sometimes there are opportunities to acquire promising assets on the cheap, and this is where people like Doug Casey or Rick Rule make massive gains in a short period of time. Doing your homework is key, which is why paying attention to what research professionals say is so important.
New Ideas With Big Returns
The last few years have seen a massive rise in a few assets classes that very few were paying attention to until recently. Now people are wondering if the big gains that cryptos posted last year are sustainable, or if the red-hot cannabis sector is going to continue to create market-smashing gains.
After the gains that people have witnessed in these outsider investments, it is no surprise that there is a huge demand for analysis on where prices are headed. Even though the IMIC is a mining and resource conference, some of the brightest minds in investing sat down to talk about new industries that have become popular rapidly.
David Morgan, Chris Parry and Jason Hamlin all shared their views on three sectors that seem unrelated at first glance. But as time goes on, the returns in gold, crypto and cannabis companies could all make money for investors that move into the right assets.
Legal Pot Is Probably Growing
Some smart investors made massive gains from the rise in “pot stocks” listed on Canadian exchanges. At first interest in the sector was broad-based, and much like cryptos, any company with exposure to legal cannabis shot up in price.
There is something of a “hangover” in how people view cannabis, and how it could be used in the future. Many people associate cannabis with smoking, but as Chris Parry summarized on stage, the real potential for the pot industry may lie with new medicinal products, and not necessarily with flowers for recreational use.
The number of chemicals that occur in high-grade cannabis are numerous, with scores of people using chemicals besides THC in order to sleep, or treat seizures. The vast majority of medicinal users could care less about smoking the chemicals, so Canadian companies that specialize in making new medicines could be the ones to watch.
Growing cannabis isn't a great business, but over time the companies that can provide consistent cannabis products in large quantities are in a great position to enter a market that is global in scope!
Cryptos Are Here To Stay
Cryptocurrencies and Blockchain simply weren't on the radar for many investors until they rocketed in price last year. Now investors are looking at the myriad of new tokens and Blockchain startups with a lot of optimism, and a bit of confusion. There is no doubt some value in the sector, but finding it has become more difficult.
Jason Hamlin invested in Bitcoin below $100 USD, and now he thinks that caution is warranted in the crypto sector. There are so many new companies that are selling tokens, and some may not be able to gain traction in the real world. The technologies that are being developed across the crypto space are innovative, but if these companies want to exist, the technology they develop has to make a profit.
Waiting to see if a startup creates a viable product is probably important for investors to consider because with the huge number of tokens floating around out there, the kind of price appreciation that Bitcoin and Ethereum saw isn't likely to happen over and over again.
Get The Gold!
Unlike cannabis and cryptos, gold is a contrarian investment because it has been shunned by Western investors. 2017 saw a huge drop in coin sales in the USA, and overall ownership of gold-related investments is still at very low levels.
It is estimated that gold and gold stocks only comprise around .5% of investment assets in the USA, which leaves them is a good position to move up against a background of massive money creation. For David Morgan, how a person chooses to invest in gold is as important as the decision to invest in gold, because there are numerous pitfalls in the precious metals sector.
One of the biggest problems in the Western gold markets is the lack of transparency and the potential for outright fraud and manipulation in the commodity exchanges. GATA has done extensive work to show how this may be happening, and if they are correct, gold ETF's like GLD is a scam.
David Morgan may see physical gold as the safest kind of gold investment there is because the Western paper gold markets could be sitting on very shaky foundations. There is no way to know how compromised the commodity exchanges are, but once you have physical gold, you will have full exposure to any price appreciation in the market.
Metal vs. Miners
There are numerous potential catalysts that could drive gold much higher. The amount of debt created over the last few decades is one of them, but increasing geopolitical strain could also rip the floor out from under the Western financial system.
Physical gold in a secure storage facility is likely the safest way to get into the gold market, but major miners are another way to gain leverage to a rising gold price. It is important to remember that gold mining stocks are stocks first, and exposure to gold second.
The action in gold equities after the Lehman collapse in 2008 left many gold investors reeling, and there is nothing preventing the same thing from happening again. Of course, once the dust settled, gold stocks were a great place to be when the markets recovered.
If you are interested in learning more about some of the best precious metal miners in the world, the upcoming Silver&Gold Summit in San Francisco is worth a look. You can pre-register today, and gain access to some of the brightest minds in resource investing!