“Encouraging people.” With Jason Hartman & Dr. Stuart Titus

Dollar cost averaging is an excellent way to invest in the markets and I would encourage people to look at this strategy, especially the younger generation. If there is concern for the markets, one could just invest those $500 into a U.S. Treasury money market fund and let that cash accumulate. Once the market settles […]

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Dollar cost averaging is an excellent way to invest in the markets and I would encourage people to look at this strategy, especially the younger generation. If there is concern for the markets, one could just invest those $500 into a U.S. Treasury money market fund and let that cash accumulate. Once the market settles down to a more stable pattern, it may be worth taking money from this Treasury Money fund slowly back into the stock market.

As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Dr. Stuart Titus, CEO of Medical Marijuana, Inc.

Dr. Stuart Titus is a 10-year veteran of the cannabis industry and the Chief Executive Officer of the first-ever publicly traded cannabis company in the United States, Medical Marijuana, Inc.

Dr. Titus has been involved in all aspects of the medical marijuana and industrial hemp industries as he also oversees a robust portfolio of subsidiary and investment companies. Through his leadership, Medical Marijuana, Inc. became the first company to deliver cannabis brands across U.S. state lines and international borders, making hemp-derived cannabidiol (CBD) available across 50 states and in dozens of countries such as Mexico, Brazil, Paraguay, Argentina and many European nations.

Dr. Titus is a veteran of the financial services industry, having worked with with well-regarded firms including A.G. Becker, Prudential-Bache Securities, and Credit Suisse-First Boston.

Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

Myfather worked on Wall Street for the majority of his career as a VP with Citibank. He specialized in US Government and Municipal Bonds. When I graduated from college, I had gone on to a 5th year MBA program which got me in a position to interview with various Wall Street investment banking firms. I was hired into a training program in April 1979 on Wall Street which started my 11-year Wall Street career.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

In 1987, the bond market dropped steadily from April through October and the widely followed 30 Year U.S. Treasury Bond rose from about a 7% rate of interest upwards to a 10% rate by October 1987. There is an inverse relationship between interest rates and bond prices — as interest rates rise, bond prices fall. During this same period, the stock market kept on making record highs.

When the 30 Year U.S. Treasury Bond hit 10% in October 1987, one large institutional investor started to sell their stock portfolio and purchase U.S. Treasury Bonds with the excess cash that they raised. Soon, other large investors followed suit and this culminated with the big stock market crash in October 1987.

Formerly, trading had been done by hand-written tickets, so that if I were a trader and I performed a trade with another brokerage firm, I would hand-write my trade on an order ticket that would be processed by our back office. A few days later a Wall Street “Runner”, a part-time employee, would then deliver the physical securities to the other brokerage firm.

When trading gets frantic, these same securities may change hands 20 times per day, so there would be lots of action for these “Runners” to deliver the securities on time.

On October 19, 1987, we experienced “Black Monday” with a still record one-day decline in stock prices (22.6%). Traders thought they had sold securities on Monday, but by Thursday of that week, many trades were still being resolved and “in-limbo” because of the massive trading volume that had occurred earlier in the week. The former manual trading system could not keep up with the sudden spike in trading volume. Thus, in the aftermath, electronic trading was initiated. It took many months to fully transition over to the new electronic system, but today, computerized and on-line trading is now the norm when it was unheard of back in the 1980’s.

On “Black Monday” when stocks had their precipitous drop, it actually spurred a huge rally in the Bond markets, as investors flocked toward a “safe haven”. We see this in today’s uncertain market environment with record low interest rates on U.S. Treasury securities.

In the aftermath we also now had ‘book entry” securities and the days of the Wall Street “Runner” were soon ended as securities now traded in electronic and registered form. Today, it is rare to find “bearer” securities.

Are you working on any exciting new projects now? How do you think that will help people?

There are many new projects we are involved with including the development of new cannabinoids that may rival THC and CBD for health and wellness benefits. Our pharma development partners are also working on CBD and cannabinoid-based medicines that may assist those with severe medical conditions that are not adequately addressed today.

International expansion efforts are also underway and we will continue to pioneer international markets and opportunities.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

After my Wall Street career, I journeyed into the field of health and wellness and began a nice career as a Physiotherapist. Along the way, I interned with a Sir Charles McWilliams of Nevis in the Caribbean, who was a former valedictorian from the University of North Carolina Medical School. Sir Charles saw my Physiotherapy skills and he arranged for me to enter into a PhD program, where I learned a significant amount about physical medicine, including human anatomy and physiology. I have always appreciated his guidance and skills over the years. Here was a conventionally trained medical doctor in the United States who did not care for the politics of healing. So, Sir Charles transformed himself into a Naturopath and has a wonderful clinic on the Caribbean island of Nevis.

Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?

These are challenging times for us all. Many of us take our health for granted, but suddenly when it is not there, life can change drastically. Checking in with families and loved ones on a regular basis, even if just a simple “hello, I’m thinking about you”, can make a huge difference. In my lifetime, we did not have cell phones and often communication was difficult or challenging. Payphones and landlines were the norm of the day and we got our news from the television or radio — even the newspaper. If you were fortunate enough to have a typewriter you could write a letter, but if you made a mistake, correcting that error was a real challenge. Often you would have to re-type the entire page to simply correct that one error.

We have gotten used to many new things that were unheard of in my youth. In some ways, the current situation reminds me of the past where life was slower and much simpler. Back then, parents had jobs and job security as well as pensions for retirement, as opposed to today’s more entrepreneurial society.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?

Dollar cost averaging is an excellent way to invest in the markets and I would encourage people to look at this strategy, especially the younger generation. If there is concern for the markets, one could just invest those $500 into a U.S. Treasury money market fund and let that cash accumulate. Once the market settles down to a more stable pattern, it may be worth taking money from this Treasury Money fund slowly back into the stock market.

Eventually, the economy will recover and rebound. Certain sectors, like travel and hospitality, might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?

From past market cycles, we have seen that markets will eventually recover and trend toward new highs over time. Certainly, many market sectors have their own cycles and ups and downs. This was termed “institutional rotation” as many large institutional investors would sell and exit one market sector, say Utilities and then re-invest proceeds into another sector, say Transportation stocks for instance.

I like a barbell strategy where one invests in solid performing, conservative, dividend-paying stocks as well as in out-of-favor sectors and growth stocks to balance the portfolio. So, one is conservative with some of the investment monies and speculative with another portion.

Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?

We have seen the cannabis sector emerge and many stocks have risen to significant heights and large market capitalizations. There has been a significant wash-out and many companies are falling by the wayside. The ones to watch for are the survivors and ones with good solid business plans and strategies.

Today, a solid performer has been Trulieve (OTC: TCNNF) and another that may be a bit more speculative would be iAnthus Capital (OTC: ITHUF).

Certainly, airlines and transport stocks, such as Boeing (NYSE: BA) have had significant falls and with an economic rebound may well come back into investor favor, which could generate significant returns for investors.

Are there alternative investments that you think more people should look more deeply at?

Gold and Silver seem fully priced, Bitcoin is quite volatile, so I am not a huge fan of these investments at this time. Many foreign currencies have fallen significantly and investors may care to review these opportunities should the world rebound from the current crisis. Oil has had a significant fall and long term seems like an interesting opportunity. Other Commodities besides oil seem a possible attractive play as well as a future store of value.

Alternative investments may include things such as collectibles: jewelry, art, coins etc. Certainly many of these require expertise but can as well be excellent ways to store and generate long term value.

If a person in their thirties and forties came to you today and said that they have $10,000 that they want to put away today for a long term investment what would you advise them to do with it?

Prior to COVID-19, we would believe this individual would have some type of job and career stability and not necessarily have a current need for the $10,000 — they would invest and re-visit in 20 years or so with the hope that this may turn into $100,000+ in the next 20 years. I would likely encourage this individual to invest in a couple of upcoming biotech concerns, as this sector can produce significant returns.

Not all projects come fully to fruition, but the good ones that deliver on their promise will generally receive at least one buy-out offer from a larger pharmaceutical entity.

Maybe put the balance into a new market sector which is emerging — psychedelics, especially in micro-doses. This arena has shown great promise for depression type patients and there are public companies that have started business endeavors in the psychedelics arena.

Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non-intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?

Non-intuitive essentials for investing:

Don’t fight the Fed (meaning Federal Reserve). If the Federal Reserve is tightening monetary policy, then interest rates will be going up. If the Fed is loosening monetary policy — interest rates will be going down and this may be a good time to buy bonds. If this spills over to longer-term interest rates, buy lower coupon bonds or even zero-coupon bonds for maximum capital appreciation.

Contrary investing: If the crowd is going all-in, then that may be the time to get out.

Elliott wave investing: Markets move in cycles and timing these cycles can make someone well above average returns.

Longer-term market cycles, such as the 80-year cycle, or Kondratiev cycles, Long Wave cycles are also interesting to pay attention to — especially if markets have been on an extended run.

Have patience as investments often take a while to perform. Emerging companies can take many quarters to get traction in sales of new products or innovations.

Diversification of assets can make for an excellent financial education so I may encourage investors, young and old to look at acquiring a variety of assets for the long term.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“It is always darkest before dawn.” I would say that oftentimes when you’re down and out and trends are going against you in every way, when you’re thinking that nothing ever will change and especially when you least expect it, things will turn around and good things manifest themselves.

Don’t get discouraged, no matter how bad things get.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂

I went from a Wall Street Bond Trader and Underwriter to a PhD Physiotherapist in my career. I created a new trend in Physiotherapy as I developed unique techniques for providing electrical stimulation therapy called microcurrent therapy and helped many patients. I was unable to get the physical therapy associations to endorse or utilize many of these ideas because of the “politics of healing.” So, when a new opportunity came to potentially develop a non-psychoactive form of cannabis — I jumped at the chance. I had already seen many major pro and Olympic athletes successfully using cannabis to help control pain, decrease inflammation plus assist with sleep issues in my clinical practice. But cannabis was not for everyone. A non-psychoactive form that can provide the benefits without the “high” — well I thought this would eventually become immensely popular.

Sure enough, the nutraceutical CBD industry emerged in 2011 and 2012 and I was thrilled to be part of this evolution and to see the popularity of CBD grow over the past few years. CBD has helped many people to regain a new sense of health and wellness, others have been able to maintain good health by supporting a large self-regulatory system within our bodies — the endogenous cannabinoid system.

What will be the “next CBD” — the next health and wellness product to improve people’s lives? I’m hard at work analyzing a few possibilities at present. Stay tuned…

Thank you for the interview. We wish you only continued success!

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