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Last week, palladium became the new darling of social media. The price of the metal rose another 10%, sending thousands of investors to Wikipedia to research what palladium is used for.

The rise in prices is not particularly surprising. Neither did the sudden interest in metallurgy. Russia was the world’s largest exporter of palladium, supplying a quarter of global consumption. The sanctions now put the entire automotive supply chain on high alert.

Palladium (orange) prices outpace oil (purple) | Source: Thomson Reuters

But attention to palladium, oil and wheat eclipses superb second order Paris. So if you missed the oil and metals boom, there are plenty of other bets waiting for you now.

An illustration of an astronaut searching for a star.

Source: Catalyst Laboratories / Shutterstock.com

Gold? Cannabis? Really?

I was at the beginning of the energy boom. I made my choice Peabody Energy (NYSE:BTUs) for our Christmas contest in December 2020 when prizes were hovering at $2. And my November call Enservco (NYSEAMERICAN:ENSV) happened when the company was still a penny stock.

But many of those top picks have now run their course. An investor buys BTUs at $26 today can not expect the same 1,200% returns. Such a feat would make Peabody worth 3.5 times more than the rest of the US coal industry combined.

And Enservco’s meme-stock run to $8.76 is unlikely to be repeated. (Those who still hold ENSV should drop their shares). Natural gas prices tend to have an upper bound since export capacity is limited.

In other words, like latecomers to a sparse buffet, many investors today find themselves with slim choices. All major commodity-based stocks have been bid on the moon.

Or have they?

Second-order winners from rising inflation

Last month I introduced the concept of second order winners — companies that indirectly benefit from rising commodity prices. While oil producers are drilling more wells, these lesser-known companies are supplying frac sand, pipelines and technical expertise.

And second-tier companies are showing better value than ever.

Best Choice Moonshot Summit Channel Partners (NYSE:SMLP) trades at barely 2x cash flow, a surprisingly low valuation given the severe oil shortage. Other Recommended Actions PBF Energy (NYSE:PBF) and Martin channel partners (NASDAQ:MMLP) have similar ratings.

For investors looking for the next big thing, these second-tier companies have the ability to go 2x…5x…10x.

Allegiant Gold (AUXXF)

When I first mentioned Lightening gold (OTCMKTS:AUXXF) in February, its CEO had just bought Additional CAD 15,650 worth of shares.

“Allegiant Gold already has a strong insider presence. Seeing its CEO double its bet suggests there is even more gold in these hills,” I wrote.

The following month, the company announced an investment of CAD 4 million by Kinross Gold (NYSE:KGC). AUXXF shares are now up 45% since it was first mentioned in the Moonshot Investor.

Rising inflation rates now give investors a second chance to intervene. According to a Reuters study, the price of gold is just behind 10-year inflation-protected bonds when it comes to beating inflation. And gold exploration companies like Allegiant Gold are essentially becoming cheap options on commodity prices.

During periods of rising commodity prices, the stocks of these junior exploration companies tend to outperform their more stable counterparts.

Insiders have already taken notice. In the past two weeks, the company’s chief financial officer and a director have joined CEO Peter Gianulis in bolstering their holdings.

And if history is any guide, they point to even more gold in these hills.

CryoMass Technologies (CRYM)

Meanwhile, rising agricultural commodity prices have created another unexpected winner:

Cannabis processors.

Specifically, CryoMass Technology (OTCMKTS:CRYM) stands out as a big winner.

The company in question has a simple activity. Using a patented freeze-drying system, CryoMass helps farmers extract more THC from their cannabis crop. And with the rising cost of labor and equipment, these growers are using every tool to improve yields.

CryoMass’ share price has already risen 50% since it was recommended in the Moonshot Investor in February. And just like other agricultural processing companies, CRYM will likely continue to rise as input prices remain stubbornly high.

There are, however, some short-term concerns. Two weeks ago, shareholders converted warrants into more than 50 million shares. Although this is a long-term bullish sign, such a large move creates short-term selling pressure.

Cannabis stocks are also a magnet for speculators. In March, the cannabis ETF AdvisorShares Pure Cannabis (NYSEARC:YOLO) prices rose 20% after the US House signaled it would pass the Marijuana Opportunity Reinvestment and Expungement Act (MORE). Shares fell after investors realized the bill didn’t stand a chance in the Senate.

But longer-term investors shouldn’t worry about that. As inflation takes its toll on agricultural businesses, efficient processing companies like CryoMass stand to gain.

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Apparently mat pull-ups are now illegal

Last week, crypto investors sued developer Tyler Gaye for spending the million dollars he raised on a personal NFT collection rather than building the “0peNFT” NFT exchange as he promised. .

The lawsuit follows the precedent set last month when the US Department of Justice arrested the 20-year-old creators of the Frosties NFT project. The young team had defrauded investors of $1.1 million after promising “tokens, rewards, freebies, mint passes, and early access to a future game.”

A Frostie NFT is displayed on OpenSea.

Room 115a? | Source: OpenSea.io

The legal community has ultimately decided that stealing from crypto investors should be illegal.

The precedent for these costumes is about as old as some of my jokes. Modern class actions began in the mid-1950s, and lawsuits between investors and shareholders soon followed. It was only a matter of time before crypto scammers were targeted.

Of course, there are many other crypto scammers, and even more despised buyers seeking justice. Heather Morgan (aka the Wall Street Crocodile) can’t be the only scammer to leave a long (and embarrassing) paper trail online.

But then again, given some of the direct mistakes we investors make, it may be the lawyers who have the last laugh.

PS Do you want to know more about cryptocurrencies? Penny shares? Choice ? Drop me a note at [email protected] or connect with me on LinkedIn and let me know what you’d like to see.

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As of the date of publication, Tom Yeung had (neither directly nor indirectly) any position in the securities mentioned in this article.

Tom Yeung, CFA, is a Registered Investment Advisor on a mission to simplify the world of investing.