- Most traditional “hedges” are currently ultra high-risk assets
- A Mental Health Pandemic currently affects as many as 2 billion people and is spiraling out of control
- Psychedelic drugs are (literally) the only hope to control this Pandemic
We live in an increasingly crazy world.
Politically, economically, and even socially, our daily lives are so far removed from “normal” that, for many people, their lives are barely recognizable in comparison to just a couple of years ago.
One obvious byproduct of the unprecedented events of our time is stress – extreme stress. Cage people in their homes, severely disrupt their daily routines, and (for many) destroy their economic livelihood and among the consequences of this will be a catastrophic toll on mental health.
The Mental Health Pandemic.
Psychedelic Stock Watch has been chronicling the transition of the Mental Health Crisis into a full-fledged pandemic. Around the world, as many as 2 billion people currently suffer from stress-related mental health disorders: depression, anxiety, addiction and PTSD.
We’ve also explained why we have a mental health “crisis” and why it is rapidly increasing in severity: the absence of adequate treatment options.
And we’ve pointed to the obvious solution for this crisis/pandemic: psychedelic drugs. These Miracle Drugs of the 21st century don’t merely provide mediocre relief of symptoms (like existing drugs and therapies).
Clinical testing of these potent drugs show they possess the capacity to genuinely cure these disorders for most people. Regular readers are already aware of this.
However, with equity markets increasingly unstable and “inflation fears” at multi-decade highs, there is a new priority that is increasingly important with many investors: hedging.
Psychedelic stocks as a hedge for economic uncertainty
When investors consider hedging for economic uncertainty, they typically look for secure and stable sectors/companies in which to invest.
Sounds good in theory. But today, where can such assets be found?
Consumer staples? As inflation rages and businesses are one “supply-chain disruption” from a disastrous plunge in revenues?
Tech heavyweights? Companies that are priced at such insane multiples that they give new meaning to the word “extreme”? And with significant anti-trust pressures materializing against them on several continents?
Real estate? Commercial real estate markets are in utter chaos. Residential real estate has risen to new bubble extremes – with the excess supply of real estate units at all-time highs. A crash waiting to happen.
Precious metals are seen as an eternal Safe Haven. But gold and silver prices are well off recent highs, and few investors take the time to give these hard assets serious consideration.
Cryptocurrencies? Right. Purchase digital gambling tokens as a “hedge”. Digital tokens with no intrinsic value and greater volatility than any other asset class. That is the opposite of a hedge.
In fact, as people look around our unstable markets for hedging security, all that most people see are stressful options.
There’s that word again.
Gamble on real estate or gamble on cryptocurrencies? Invest in a market “bellwether” (at record multiples) – and hope that the bottom doesn’t fall out from under you.
Very stressful. Very little security.
Obtaining economic security is very uncertain at present. What is certain is that the majority of people will continue experiencing increasing stress as they attempt to navigate (survive) the economic waters in which we are all floating.
More stress = more mental health disorders = greater need for psychedelic drugs/therapies.
Investing in mental health stocks at a time when mental health is an unprecedented (and worsening) crisis would seem to be a pretty sound economic hedge. Much like how Americans living in the drought-ravaged Southwest may see water as a good investment right now.
Psychedelic stocks as a hedge for political uncertainty
Politically, our lives have changed enormously.
Increasingly authoritarian Western governments have (apparently) completely forgotten the concept of “human rights”. Instead, rigid and capricious new laws/rules are constantly herding and bullying people – in a manner never before seen in Western societies.
Very stressful. And no end in sight.
As new “variants” of COVID-19 emerge, we have governments threatening new lockdowns – irrespective of vaccination status. But that’s only the beginning of the extreme political stress which is now a daily part of our lives.
Internally in the United States, hatred between Republicans and Democrats (and the followers of both parties) has hit new extremes.
Elections no longer have anything to do with choosing the best government. Instead, the hatred-stoked partisans of both parties fixate exclusively on choosing a candidate most likely to “defeat the Enemy”.
It’s stressful to hate. It’s much more stressful to live every day of your life regarding roughly half of your neighbors as your implacable enemies.
Externally, the world many be a more stressful place politically, if that’s even possible.
The United States (and its Western allies) have been engaging in the most-extreme saber-rattling the world has seen since the Cuban Missile Crisis. The prospect of a major international (or global) war has not been this great since World War II.
Ironically, the continued Prohibition of psychedelic drugs may be the only thing stopping the United States from initiating a major war.
The U.S. military is experiencing an even more severe Mental Health Crisis of its own. Twenty-two U.S. veterans commit suicide every day. Double-digit percentages of current and former personnel suffer from varying degrees of disability from mental health issues.
The Department of Defense cannot afford this atrocious rate of attrition due to mental health issues.
Only a small minority of Young Americans are even eligible to enter the military. Over 70% are disqualified due to obesity, lack of education, or a criminal record.
If you’re worried about the prospect of a major war, invest in psychedelic stocks. If you’re worried about the incapacity of the United States to fight a major war, invest in psychedelic stocks.
Psychedelic stocks as a hedge for social uncertainty
Just saying the word is enough to induce a stress response from most people. People weren’t intended to be caged any more than other animals.
Lock them up, threaten their economic survival, and constantly frighten them with (in hindsight) exaggerated fears of a virus with a low level of mortality, and you have a perfect recipe for a mass Mental Health Crisis.
If our governments were trying to drive everyone insane, they could not possibly have done a more effective job. But that’s only the beginning of the social problems (and dramatically increasing stress) that we are currently experiencing.
In the United States, there is also massive droughts, unprecedented heat-waves, increased homelessness, increased drug abuse, a dramatic escalation in mass shootings, millions facing the threat of eviction, 100’s of thousands of small businesses on the brink of failure, and unprecedented social unrest in major cities.
Stress, stress, and more stress.
Is it possible that the U.S. government can solve all these crises? Is it likely that the U.S. government can address any of these crises?
While there is great uncertainty in our lives today, what is clearly in focus looks very, very bleak. If people wanted to make one high-odds bet today, it’s not on Bitcoin going to infinity but rather mental health disorders going to infinity.
As the United States and the other (literally) sick societies in the Western world get sicker and sicker – mentally – investing in psychedelic stocks would seem to be an excellent hedge for social uncertainty.
A unique hedge for an insane world
Many people would scoff at the suggestion that small-cap stocks in an emerging industry could be a “hedge” during a period of extreme and unprecedented uncertainty (and risk).
These people would rather buy bonds, that pay no interest, at extreme bubble prices. Or, they would rather by shares of Tesla and pay 200 times forward earnings.
Or, they would rather “invest” in real estate markets that are currently pumping out millions of new housing units that no one will ever live in.
Everyone has heard of the horrific collapse of the of the large Miami condo complex. What few noticed is that this would have been a much worse disaster if over 40% of the units in this 40 year-old building were unoccupied.
How much is a real estate unit worth today? That’s a difficult question to answer for any real estate market.
How much is a real estate unit worth that will never have an occupant? That’s an easier question to answer: much, much less than the current asking price.
In a world so insane that real estate has become a Ponzi scheme, does it really sound that crazy to point to mental health stocks as a general hedge for that world?
It’s a crazy world. And it’s getting crazier – that’s a guarantee.
Hedge against all the stress and insanity. Invest in psychedelic stocks.