David Frazier: Grab This Under-the-Radar Pot Stock While It’s Cheap


Hello, I’m David Frazier, the chief market strategist and senior equity analyst for RealDaily.com’s Maximum Profit Trader and Small-Cap Profit Confidential services.

This is the second in a series of videos that we plan to record every week regarding factors and developments that are likely to affect the direction of the worldwide financial markets and how you, our viewers, can profit from those developments.

In this week’s video I’m going to briefly discuss the recent trading action in the U.S. stock market and where I think stocks are headed from here, as well as share some important information with you regarding our Maximum Profit Trader service.

So, as I’m sure you know, stock prices in general were very volatile over the past couple of weeks. I mean sometimes seeing swings of 700 to 1,000 point swings in the Dow Jones Industrial Average in any given day.

Looking forward I expect stocks to continue to be volatile over the next few weeks but for that volatility to narrow somewhat, that is for the swings not to be quite as wide as there were over the past couple weeks.

However I also expect and my research indicates very strongly that stocks in general will continue to trend lower over the next few months.

But that doesn’t mean that you can’t make money in this market.

Quite the contrary. I expect plenty of opportunities to be presented where stocks will fall to short-term oversold levels that longer-term investors and speculators will think that the stock market downturn is coming to an end, and they’ll come in and buy stocks, and then we’ll have sharp rallies for a few days.

I mean, that’s generally what happens in any given stock market downturn. I mean stocks don’t go just straight down at a 45-degree angle. They tend to move up and down as their heading lower.

So there’s going to be plenty of opportunities to buy stocks on a short-term basis, hold the money for a few days and likely make returns of between 8% and 15% in only a few days or a couple of weeks at the most.

A recent example of my recommending subscribers to our Maximum Profit Trader service to take advantage of such opportunities is a recommendation that I made on November 28th for our subscribers to buy Sears Holdings (SHLDQ).

Now I know you’re probably already thinking “Oh my gosh, are you kidding me? Sears Holdings? No, no, no I don’t have any interest in something as risky as that.”

Well, my partner, my business partner in my investment research firm, when I told him that I was planning on buying the stock and recommending it to subscribers to one of my services, he also said “Are you crazy? That’s awfully risky.”

I said “Robert, risk is determined by knowledge and expertise in any given subject. I see this as being not risky at all.”

And why is that? Because at that point in time Sears Holdings, I don’t even recall exactly, was trading for around maybe 28 cents a share. And you know the company, you know, it looked like the company was going to go completely out of business.

But Reuters news agency reported on November 28th, the same day that I recommended the stock (or the day before, I’m not sure, I don’t have a right in front of me) that it had indications that the company’s chairman, Eddie Lampert, who’s a very successful hedge fund manager and who owns more than 50% of Sears stock, was going to make an offer to take the company private.

I said to myself, you know what, that’s probably going to happen. And why did I think that was going at it. Well it’d very simple.

Because Mr. Lampert, once again, already owns more than 50% of Sears stock. He’s invested billions of dollars in the company. Do you think he’s going to let this company go to into bankruptcy, full bankruptcy, full Chapter 11 liquidation bankruptcy, if he can do something to prevent that?

I said to myself the answer is “no.” He’s going to do anything and everything that he can to at least try to prevent that.

Well, sure enough, it took a few weeks but on December 28 Mr. Lampert announced that he, through his hedge fund and and an affiliate, that he was in fact going to make an offer that he did make an offer on December 28th to take the company private, to buy all shares that he does not already own.

What do you think happened? Well, Sears stock rallied substantially over the past two days and subscribers to our Maximum Profit Trader service who bought the stock on November 28th and held it through today, January 2nd, are up are up 38% in that stock at only 22 days, 22 trading days.

And so therefore you know we don’t want to get greedy. We’re up 38% in 22 trading days, so I advised them today, on January 2nd, to trade it at the market open on Thursday, January 3rd and I’m sure it’s going to hold right near that level at least at that market open, if not move higher. So they’re going to record a 38% gain in only to 22 trading days.

Now I don’t want to give the wrong impression here. Not all of my recommendations turn out to make money. Of course not. We have losers, but I always monitor my recommendations very closely and help our subscribers to minimize the losses when I’m wrong and, having said that, approximately 68% to 70%of my recommendations thus far have ended up making money.

That’s pretty darn high for a short-term trading service, so I encourage you to try out this service for the next 30 days. We’re offering the service at only $1.

One dollar for the next 30 days and I generally make about four to six trading recommendations during any four-to-five week period, so there’s a good chance if you do try us out … and don’t put all of your money in one recommendation, put only a small amount of money, don’t take big risks, that would be foolish… but if you do try our service for that $1 for the next 30 days there’s a good chance in my opinion that you will be able to cover your cost for an entire annual subscription to our Maximum Profit Trader service.

Now, having said that…this is all in the past. You know this Sears recommendation and these others, the 68% to 70%, I don’t have the numbers in front of me, successful trades that I’ve recommended.

I’m gonna give you one for free here in this video. That’s Innovative Properties, Innovative Industrial Properties is the full name of the company, Innovative Industrial Properties.

By the way this video is not scripted so you know I’m going to make some mistakes when I’m speaking so please bear with me. The symbol is IIPR.

Well, it’s a pot stock. “Oh wow, another big risk, another risky speculation.”

No, it’s not. It’s not really a pot stock. What it does, Innovative Industrial Properties buys, owns, then leases back to other companies properties to companies that produce and sell cannabis, so they have almost…there’s very little risk in this company.

In fact the company is extremely strong financially and it’s increased its revenues and earnings at a very fast pace over each of the past six quarters.

Now that marijuana stocks are, there’s not as much speculation in them right now, over the past couple of weeks as there was a few months ago, there’s not as many people paying attention to them and therefore I would argue that the downside risk is limited.

I don’t want to get into all the details but this is a stock that I recommended today, on Wednesday January 2nd, for subscribers to our Maximum Profit Trader service, to buy it to market open on Thursday, January 3rd.

Now is it going to move up tomorrow? I don’t know. I have no idea what it’s going move up in price tomorrow. I don’t claim to be able to get in my timing exactly right, even though I’ve been extremely good at calling forecasting peaks and bottoms in the overall stock market.

You know, day trading trading on a short-term basis for a few days, it’s very difficult. But I do feel very strongly … or I know that the company’s once again it’s very strong financially, its growing its revenues and earnings at a very fast pace…in my opinion, the downside risk for the stock was very minimal while the upside potential is very substantial.

I think there’s a good chance that people who follow my recommendation for Innovative Industrial Properties, once again symbol IIPR, I think there’s a good chance they’ll make between an 8% to about a 15% return on that stock within the next two to three weeks.

Looking forward, there’s numerous other small company technology stocks that I’ve been monitoring and not risky stocks, not pink-sheet stocks, not over-the-counter bulletin board stocks, but Nasdaq-traded stocks, stocks of strong companies, strong in terms of their balance sheet, their liquidity, and solvency.

They’re growing the revenues and earnings on a fast pace, that have sold off sharply with the overall market and that appear to now be trading at some bargain prices, so I expect to make numerous new stock recommendations for our short-term trading service, Maximum Profit Trader, during the coming weeks.

So I encourage you to try this service for only $1 for the next 30 days and in the transcript of this video you’ll see several links where you can click to subscribe to our service.

I’m going to wrap this video up, I’m going to wrap this up now as I said we plan to record these videos every week.

Don’t worry, I’m not just going try to sell you something every week. I’m going to provide you with information that, in my opinion, will help you to much better navigate the financial markets, to avoid the big downturns, and profit from the major upturns into worldwide financial markets.

So I thank you for listening and I hope you tune up tune in again next week.

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