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The Boiling Frog: June 2019 Newsletter

Ross Silver • Jun 20, 2019
When I study the various inputs I use for making an investment decision, human psychology is the input I put the most weight into. For example, if I hear a CEO pitch me on a story that sounds compelling, the CEO seems genuine and I believe others will want to buy the stock after hearing the CEO speak; I may buy the stock on the spot. When I heard the Beyond Meat (ticker: BYND) story I knew others would be blown away and that stock would likely work and it has…so far. With that said, sizzle must come with substance because sizzle can only last so long. Speaking of sizzle…

The boiling frog is a fable describing a frog being slowly boiled alive. The premise is that if a frog is put suddenly into boiling water, it will jump out, but if the frog is put in tepid water which is then brought to a boil slowly, it will not perceive the danger and will be cooked to death. The story is often used as a metaphor for the inability or unwillingness of people to react to or be aware of sinister threats that arise gradually rather than suddenly. Many investors tend to get comfortable when things are working and as such often lose sight of the fact they may be playing a game that they have no chance at winning. An example of that, at least how I see it, is the market today. The Fed and our President are gaming this market like no other administration I have seen in my lifetime. Global economic data is not pretty and there is no question the global economy has slowed. Add in restrictive trade practices and new barriers of entry into U.S. markets and that slowing will be exacerbated, ultimately having a profound impact on U.S, consumers and businesses. Despite these facts investors continue to “buy the dips” given that strategy has worked for the past decade so why stop right? Don’t be like the frog who doesn’t notice the water has gone from tepid to a boil and is now laying belly up in the pot!

Sports Desk

The NBA and NHL playoffs have come to a close and as such we enter the sports low period. Yes, baseball is on but there are too many baseball games and 99% of them mean nothing so we sports enthusiasts are now forced to watch things like the Little League World Series or even worse, soccer. I am just joking around but in all serious, the major professional sports that I care about seem like a lifetime away (football and basketball). I was hoping the Warriors could pull off an upset but the Raptors were just too much. As for the NHL, I was glad to see St. Louis bring home its’ first Cup! I read that a bettor in Las Vegas placed a $400 bet on the Blues to win the Stanley Cup at 250-1 odds. Whoever you are, well done!

Featured Companies

 CleanSpark, Inc.  (CLSK) is a fast-growing, well-funded company that provides that provides energy software and control technology in the United States. Their products and services allow organizations and governmental entities to create energy efficient and cost effective micro-power grids. The company’s technology is currently being used by commercial, industrial, mining, defense, campus, and residential customers.  The company also provides turnkey microgrid implementation services, micro-grid design and engineering, project development consulting, and solar photovoltaic installation and consulting. In addition, the company offers mPulse software suite, a modular platform that enables fine-grained control of a Microgrid; and microgrid value stream optimizer that provides a robust distributed energy and microgrid system modeling solution. To learn more about CleanSpark, visit (www.cleanspark.com)

Emerald Health Therapeutics (EMHTF)  is a Health Canada Licensed Producer of medical cannabis, and the company has recently secured recreational sales licenses with several provincial governments. Emerald is vertically integrated, seed-to-sale enterprise, with a 50-50 joint venture ownership in a one of the largest indoor cannabis grow operations in the world. Emerald is also positioned to become one of Canada's leading manufacturers of premium CBD products from hemp. The company has a stellar management team, that is driving the business towards creating cannabis-based formulations for proprietary consumer and medical products.

Applied Biosciences (APPB) is a diversified CBD company, focused on delivering science-driven synthetic cannabinoid therapeutics, high-quality CBD products, and state-of-the-art testing  operating in three business verticals: synthetic cannabinoid-based branded pharmaceuticals; synthetic cannabinoid-based OTC pharmaceuticals; and consumer wellness, which includes scientifically based CBD and non-CBD ingredients for consumers, women’s health, sports medicine and animal health. The company recently partnered with heavyweight boxing champion, Shannon Briggs, to promote the company’s “Camp Organics” brand of CBD products for recovery and pain management. To learn more about Applied Biosciences, visit  (www.appliedbiocorp.com)

Inpixon (INPX) is a technology company that helps to secure, digitize and optimize any premises with Indoor Positioning Analytics (“IPA”) for businesses and governments in the connected world. Inpixon’s IPA is based on new sensor technology that finds all accessible cellular, Wi-Fi, Bluetooth and RFID signals anonymously. Paired with a high-performance, data analytics platform, this technology delivers visibility, security and business intelligence on any commercial or government premises worldwide. The Company’s customers include shopping malls, airports, government agencies, local publications, among others. Other potential sales channels include hotels and resorts, gaming operators, healthcare facilities, and office buildings. The company recently acquired Locality Systems, a company specializing in wireless device positioning and radio frequency (RF) augmentation of video surveillance systems. The acquisition gives Inpixon a more robust product offering that will allow businesses to track and identify persons of interest using RF technology. To learn more about Inpixon, visit (www.inpixon.com)
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