Nick O’Connor – Capital and Conflict (Great Britain) –
What connects an outlawed market that’s legal once again… the biggest moral conundrum the tech world faces… and a big development for post-Brexit northern England?
They’re all a part of today’s Capital & Conflict, of course!
First, the markets. The FTSE 100 closed out last week at 7,243, a shadow below the all-time high it made earlier in the year. In that sense, Britain mirrors much of the Western world, with markets at or close to all-time highs.
We’re drifting higher, with pretty low volatility, given the wider political situation. In fact there’s an eerie calm in the markets today. Perhaps that’s because the markets have been conditioned to expect each dose of bad news to be offset with more loose money from the state.
But that’s been the case for eight years. It doesn’t explain the last few months, in which markets have soared. Perhaps Eoin Treacy is right: the simplest way to understand and predict markets is to understand behavioural psychology. Markets are just crowds of people. And en masse, people act in instinctive ways.
Donald Trump’s election was a powerful psychological catalyst – it gave people cause to believe there’d be looser regulation, more government spending and inflation. It won’t be reversed without an equally powerful trigger that forces the markets into reverse. That may not happen for a long time.
By the way, if you’re interested learning how Eoin trades the financial markets – and you want to get started yourself – you should sign up to see Eoin’s upcoming training video series. It’s free. And I can guarantee you’ll discover a profitable secret to trading that 99% of trading “systems” completely ignore. Follow this link to register for Eoin’s training now.
But back to the markets. What might cause them to instinctively question the Trump rally? Remember, you need “story” to justify lower prices and a powerful and clear catalyst to lend urgency to it.
What could that be? According to David Stockman (who was budget director under the Ronald Reagan administration), there’s a story and a trigger everyone’s missing: the US debt ceiling, and 15 March:
Right now the markets seem content to ignore this. But for how much longer? And what could lend enough urgency to the story to reverse momentum in the markets? More on that another day!
Does The Donald get high?
If you’re an Exponential Investor reader, you’ll notice that the rest of this week has a heavy bias towards cannabis. Why? Because right now the market for commercial marijuana is developing rapidly, which is creating major opportunities for investors, traders and speculators.
Later in the week Eoin Treacy will be presenting the one pot stock to buy now. It’s a high risk speculation. But if it comes off, the payoff could be extreme.
Increasing numbers of US states have been voting to legalise cannabis for commercial/recreational use. Colorado and Washington were the trailblazers on that front. But the big one came last year (on the same day as Trump’s election, ironically) when California voted to legalise it.
Legalisation doesn’t take effect until the start of next year. But when it does, it’ll be an enormous market with enormous potential. As I wrote last week it is comparable with the end of prohibition creating a legal market for alcohol. Imagine owning a brewery or distillery then!
That’s Eoin’s goal now: own the supply chain of the cannabis industry as it legalises. But is it truly “legal”? Increasing numbers of states are legalising it. But it’s illegal on a federal level. Given the states are mostly in charge of enforcing drug operations, it’s unlikely you’d see the federal government step in. “In terms of marijuana and legalisation, I think that should be a state issue, state-by-state,” Donald Trump said in Nevada in October 2015.
But who knows exactly what he’ll do. Perhaps he’s now vehemently anti-cannabis. Perhaps he’s all for it. Figuring out actual policy from amidst the ramblings is difficult. There have been rumblings that the federal government will attempt to be stricter in its application of the law. I doubt that’s anything but political posturing for now. But it does create the risk of a turbulent and volatile time for pot stocks.
You should know that going in. It’s a risky play. But some risks are worth taking. This could be one of them. Look out for more from Eoin later in the week.
Do we have the right to perfect genes?
If the technology exists to correct mistakes – and make improvements – to your genetic code, do you have the “right” to do so? Who decides what is and isn’t allowed, or should we be free to explore the full potential of genetic engineering?
It’s the same argument we come back to time and again here at Capital & Conflict – the battle between personal liberty and centralised control. But it’s more than that. If I have the freedom to alter my DNA, for instance, that could affect everyone in the world. Who’s interests come first: the individual or the species?
Answering that question is beyond the remit of today’s letter. But we are right to ask it. Advances in genetic editing technology like CRISPR demands that we start to figure this stuff out – because it’s going to become a real choice before long.
Josiah Zayner, the man behind ODIN, a firm that sells “DIY gene experimenting kits”, put it like this in a recent interview:
Where do you stand? I’m always interested to find out. You can reach me at firstname.lastname@example.org.
Associate Publisher, Capital & Conflict