By Vadim Pokhlebkin
Fri, 02 May 2014 17:00:00 ET
Dave Allman, who has worked closely with Bob Prechter for 30+ years, calls himself our “resident skeptic.” Why?
Because you can spend a week researching an idea — only to have Dave take one look at your “evidence” and say, “So what?”
The cold-shower feeling you get from that response has a silver lining: When Dave greenlights a project, it’s bullet-proof. So, when I learned that he was presenting a research piece of his own at the April 5 Social Mood Conference, I knew I had to see it.
Yes, it was worth it. See for yourself, in this excerpt.
Socionomics attempts to identify changes in old trends and the beginning of new ones. Yes, socionomics will almost always be early. On the contrary, traditional finance — Wall Street, banks, traditional portfolio managers, et al — are always late.
Plus, the flip side is that they miss out on the huge multiples which are there for early adopters — but simply do not exist for latecomers. Let me give you an example – and speak about something where I have a lot of experience.
In July 2009, The Socionomist published a study called “The Coming Collapse of a Modern Prohibition.” Euan Wilson, the author, followed up on a topic that Bob Prechter’s Elliott Wave Theorist first broached in 1995 – that marijuana legalization would happen in the next major bear market in US stocks.
Here’s one of the few marijuana-related issues that was trading at the time in 2009: Medical Marijuana, ticker symbol MJNA:
About a year later, I decided to experiment with drugs.
That’s right, in October 2010, for the first time ever, I bought marijuana… stocks. In my IRA, no less, because apparently while they do have restrictions on what you’re allowed to do in an IRA, owning barely pink-listed, non-SEC compliant, penny stocks is not a problem.
By the way — so, I’m long pot stocks, and I work at a place nicknamed “bear market central.” What does this make me? Anyone?
That’s right. Enjoy it. This, by the way, is an awesome name for a newsletter. If one of you steals it, I’d like a comp.
So there’s Oct 2010:
A year later, in October 2011, Gallup reports that 50% of Americans support legalization — for first time ever. And a year after that, in the national election, Colorado and Washington become the first two US states to legalize recreational marijuana:
Now at this point, there were a few more issues traded, so I’m going to switch to a broader index created by one of our Social Mood Conference speakers, Alan Brochstein. (And Alan, I promise not to step on your stash too much.)
His 420 investor cannabis stock index is a much broader representation of the still-fledgling industry. A couple more key events reflected on the next chart:
- On August 8, 2013, CNN’s Sanjay Gupta reversed his long-held stance saying, “We have been terribly and systematically misled [about the benefits of marijuana] for nearly 70 years in the United States, and I apologize for my own role in that.”
- On Sept 13, 2013 Alan Brochstein, sensing a growing desire among the herd, launches 420 Investor.
- On November 8, 2013, The Socionomist publishes Gary Grimes’ update of Euan Wilson’s original “Collapse of Modern Prohibition” study, updating it further and reminding the Socionomist audience of the potential surrounding marijuana legalization:
- On January 1, 2014, Colorado goes live. More importantly, on January 3rd, 2014, Alan Brochstein accepted our invitation to speak at the 2014 Social Mood Conference.
And that was when things really started to rock and roll, as the next charts shows.
By the way, at this point banks, still not quite seeing the potential, listen to Nancy Reagan and “just say no” to $$$ from legal pot businesses. (NYT)
And finally, on Feb 3, 2014, Jim Cramer/CNBC begin coverage of pot sector, with the index up seven-fold from a month earlier.
Did you like that?
Dave showed other lively examples of how socionomists anticipated stellar investment opportunities in several areas, including Bitcoin.
You can watch Dave’s entire presentation (and he is much more engaging on video) instantly, when you purchase the streaming-video recording of the 2014 Conference.
You also get live presentations by all 12 speakers. Get the 12 streaming, on-demand presentations from the 2014 Social Mood Conference now, via this special offer >>