- Companies in the cannabis sector are currently being closely monitored on the financial market and some stocks are rising rapidly.
- The securities of some cannabis producers have risen by several thousand percent in the space of just a few years.
- However, chief analyst at Solvecon Asset Management, Folker Hellmeyer, said that investors should aim to look at companies’ analyses rather than blindly following trends.
It looks like the stock market has a new favourite word: cannabis.
Companies in the cannabis sector are currently being closely monitored on the financial market and some stocks are rising rapidly.
Looking at the securities of cannabis producers such as Canopy Growth or Aphria, both have risen by several thousand percent in the space of just a few years.
The biggest upward thrusts for cannabis shares were towards the end of 2017 and in recent weeks. It seems medical cannabis may have actually dethroned Bitcoin as the new stock market hype.
Investors seem to be making a lot less noise about Bitcoin now — while those who invested in Bitcoin from the outset are obviously still clearly in an advantageous position, crypto currencies have long since lost their lustre.
Former chief analyst at Bremer Landesbank and current chief analyst at Solvecon Asset Management, Folker Hellmeyer, has worked on the stock exchange for decades and has been witness to several hypes throughout his career.
“We live in a media-driven society in which every piece of information is immediately accessible to everyone,” he said in an interview with Business Insider. “As a result, information and speculation spread much faster than 20 or 30 years ago.”
With cannabis, it’s greed that’s driving investors
The stock market is a place where everyone is constantly on the lookout for “the new Apple” or “the new Amazon” and it’s primarily driven by greed.
If a political decision were taken such as, for example, the partial legalisation of medical cannabis, this would lead to a speculative frenzy on the stock market.
“There would no longer be a rational analysis of companies — everyone would want to be in on the hype and to make money out of it. In this way, the boom would be driven even further,” explains Hellmeyer.
The expert said that, if he’d learned one thing throughout his entire career in the stock markets, it was that you don’t blindly follow trends.
“You don’t follow a hype,” he said, “because an important principle on the stock exchange is: ‘the profit lies in purchasing’.”
Follow the full article here: