VOTED THE WORLD’S BEST INVESTMENT ADVISORY

October 5, 2018 Vol. 50, No. 19. Pages 397-416 $6.00

IF YOU’RE LOOKING FOR THE MARKETS’ NEXT TRADING OPTIONS EDITOR’S CHARTBUSTER, FOLLOW THE DISRUPTORS NOTES Making the Bontis bets on future bear call hile notori- ously anti- after a Tesla drugs and Internet penetration alcohol, Kiss Twitter frontmanW Gene Simmons hat is the next population offline. By Syvia Poon is still willing to back a frontier of tech- Mr. Bontis further asserted that solid cannabis investment nology? Where the adoption of Internet-enable ow many breaking fi- when he sees it, joining do we think we devices so far suggests that as this nancial news bulletins “Wwill be?” asked McMaster Uni- population joins the digital world report on boring stocks Invictus MD Strategies versity business professor Nick and the rest of us upgrade, the In- of little movement or Corp. as “chief evangelist Bontis during the opening cere- ternet will only become more dis- Hstaid companies smoothly chug- officer.” Speaking at the monies of the Mon- ruptive and ubiquitous. ging along, going about their nor- Toronto MoneyShow, he eyShow on Sept. 14. To illustrate, he noted that in mal business? Not too many out was keen to point out he The answers to those ques- Canada, there are currently 3.1 there, eh? had done his research and tions, he forcefully argued in his television sets per household. By If you are reading this column, I keynote address, are vital to figur- ROBIN POON comparison, there are already 8.1 assume you follow financial news, saw marijuana as a great ing out what stocks will next cap- Internet Protocol-enabled devices which usually report on unusual investment from a medi- ture the market’s imagination and, per household. stock price movements. How often cal standpoint. sooner than later, grow by leaps Emerging technologies such as have you wished you had a crystal Cannabis is certainly and bounds. growth potential for Internet use Apple Inc.’s driverless cars and ball to predict what was going to the toast of the town, giv- Mr. Bontis serves as a member worldwide. Amazon.com Inc.’s drone deliver- happen so you could have capital- of Harvest Portfolios ETF’s board The professor blamed “Anglo- ies indicate continued market ized on it? en that even beverage be- of directors. phonic arrogance” for Canadians’ dominance on their part. Quickly I assume not many of us pos- hemoth Coca-Cola Co. is In addition, Mr. Bontis is an tendency to disregard internation- rising computing power, to the sess working crystal balls. But there considering cannabis-in- award-winning tenured professor al circumstances. point of mirroring human thought are stock option strategies that fused soft drinks. The of strategic management at the Although 91 per cent of Cana- (an event tech experts refer to as capture profits precisely from the flurry has spread to the DeGroote School of Business at dians had Internet access in 2018, the “singularity”), will add to the nature of price-moving events, McMaster University. His ground- that figure was only 25 per cent in adoption and then indispensabil- which can be put in place AFTER U.S. too, where Canadian breaking doctoral dissertation on 1998 and a mere four per cent in ity of such technology. such a movement occurs. pot company Tilray Inc. the mutual fund industry went on 1993, he noted. For context, in As for finding future titans, Mr. Fresh off of discussing the con- has enjoyed a chaotic, to become the number-1 selling 1997, sales of personal computers Bontis predicted that, like the cept of vertical spreads in the last very dramatic ride on the thesis in Canada. exceeded sales of television sets. Google search engine and iPhone, column, I seized an opportunity to stock exchange. The He was also previously an Worldwide Internet use has blockchain technology will soon execute a Bear Call trade that pre- award-winning securities analyst also increased exponentially since become indispensable to life, too. sented itself. shares were both on fire at CIBC. the late 1990s. However, overall Taking pains to distinguish Many of you were probably and then saw rapid de- Mr. Bontis pointed out that al- Internet penetration is still much, between blockchains and cryp- shaking your head when you read clines within days. though Canada’s economy is un- much lower than in this country. tocurrencies, the professor ar- about the frenzy surrounding Tes- The direction of tech- derweight on the technology In 2018, 3.9 billion people around gued that the former are useful la Inc. (TSLA-NASDAQ, US$299.02) nology was another hot sector, Canadians should over- the world had Internet access, for far more than digitally con- stock on Aug. 7 and thereafter. On weight high technology invest- compared to 30 million in 1999, topic at the Toronto Mon- ments given the remarkable leaving almost half the world’s See MoneyShow on page 398 See Poon on page 398 eyShow. “What’s the first thing you look at in the morning and the last THE SENTIMENT PIE thing you touch before Marijuana’s supply-(block)chain solution sleeping?” asked profes- By Jordan Lazaruk mentary Budget Officer estimates J.L.: What does the market- Bears sor Nick Bontis. will exceed $5.5 billion annually. place for marijuana distribution 18.1% Mobile phones and rime Minister Justin Distributors, producers, and post- look like today? similar devices are only Trudeau announced on production processors are all gear- J.D.: Virtually every retail loca- going to become more in- June 20 that Canadians ing up for the national rollout. tion, or dispensary, in this coun- would be able to purchase One major piece of infrastruc- try is illegal on federal and dispensable to us. Pand consume marijuana recre- ture is still lacking: efficient and ef- provincial levels. The City of Van- As integrative technol- Bulls ationally before the end of 2018. fective supply chain management. couver is similar to Amsterdam 59% Unsure ogy tethers our phones to Setting a target rollout date of Oct. However, a Canadian startup where it's illegal but the mayor 22.9% our refrigerators, our cars, 17, the prime minister proclaimed, stands at the forefront of develop- decided to issue licences and Market sentiment is quite similar to and our heating systems, "This is something that we want to ment in this field. there's little to no enforcement. get right." Rubikon Blockchain Corp., That's where we are now. where it was two weeks ago. In fact, what will companies like With less than a month re- launched in August 2017, is build- In and Quebec, there the bears have stayed still at 18.1 per Apple Inc. dip their toes maining, provinces and business- ing a supply chain solution based have been quite a few crackdowns cent of the pie. Optimists will find easy into next? Mr. Bontis es alike have been scrambling to on blockchain and radio-frequen- or raids by the RCMP, and even company in the bullpen, though it lost set up the necessary regulations cy identification (RFID). here in B.C. when minors get a 100 basis points since last issue to seems to think it will be end at 59 per cent. Meanwhile, the un- and infrastructure to handle a Designed specifically to suit na- hold of the stuff. driverless cars. — R.P. sure gain the same amount and take marijuana industry that the Parlia- tional and international compli- In and Toronto, up 22.9 per cent of our Sentiment Pie ance standards, Rubikon's there are hundreds of dispen- as tariff threats between Beijing and software is tailored to assist Cana- saries. What people who haven't Washington, D.C. intensify. dian producers from "seed to sale". walked into a dispensary may not Source: Investor’s Intelligence. I spoke with Rubikon’s founders, realize is that there are no con- chief executive officer Joel Sem- sumer protections in place. czyszyn and chief financial officer You can pick up two items James DeMello, about the evolving from a shelf - one of them pro- landscape of Canadian marijuana duced illegally and one of them production and distribution, and produced legally - and there is their supply chain software solu- tion strategy. See Lazaruk on page 399