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ENDING MARCH AND INTO APRIL WE GO

MARCH 30 (EVENING) – As expected, our essential shelter in place recommendation has been extended thru the whole month of April.  April has been projected to be the month where we finally peak in cases and start to see the curve flatten and rollover, hopefully.

I am confident the shelter in place will be extended to at least May 15th.  Maybe until Memorial Day weekend.

Trump is right when he says people in this country want to live a normal life.  Colds and the flu have never gone away.  We live normal lives with them coming and going thru the population and seasons.  I guess that will be the way with Covid-19, also – when we have a vaccination.  That is supposed to be 12+ months away.

There is a point where we just have to get back to normal and deal with the Covid-19 cases and deaths.  There is no choice.  But, we had to do this Social Distancing in this initial phase so as to avoid the 2,000,000+ deaths that were projected if we did nothing.

Continue to be safe.  And take advantage of the world being on a long time out.  I always wanted things to slow down.  To stop.  Time to stand still so we could relax and smell the roses.  Now is that time. This likely will not happen again in our lifetime.  Take advantage of this.  Reduce your stress, permanently.  Learn that things do not need to be rushed.  Do all of those things you stacked up to do when you finally had some time to do them.  You have that time now!

As for the stock market, today was up a bit.  I still cannot rule out a move above last week’s high of 22,595.  Whether or not that occurs, the expectation of a 25%+ decline remains.  I took advantage of the rally last week to get out of some oil stocks I stupidly got in too early.  We all make mistakes eh:)  But, best to cut your losses than let them ride.

Oil broke below $20 today.  I believe we are seeing the final down wave to what might well be the end of a 120-year combined bull and bear market.  I haven’t followed up on the timing issue mentioned last week.  So, just sitting on the sideline and watching the crash continue.

Gold and silver didn’t do much.  Significant declines are still expected.  That is a bit longer-term view so this isn’t a day-to-day forecast.

Everyone went crazy about the US Dollar being so strong.  So last week, I believe, was one of the worst weeks ever for the USD.  The markets love to get everybody to one side of the ship before sinking them.

So, nothing has changed re my forecasts.  The markets are starting to trade in a bit of a range.  This helps alleviate all of the record oversold readings for technical indicators.  We can’t go straight up to infinite nor straight down to zero.  More Wednesday evening when I post next.

I will drop this after one more mention of it….I don’t recall firefighters and police whining after 9/11.  Those people were proud of the fact that their peers ran straight into those towers to save as many people as possible.  I don’t recall them saying they were like lambs being led to the slaughter.  They were true heroes.  They know every day they go to work could be their last.  They don’t ask for sympathy.

So, I just don’t get it, and am truly disgusted by, the doctors and nurses in New York complaining about everything…we are risking our lives, we are overworked, whine whine.  They are truly ruining the appreciation they would get and deserve.  Maybe they just aren’t as tough as firefighters and police officers.  That isn’t in doubt really.  If you didn’t think you were going to be in many situations where you could become very sick or die by helping others, you shouldn’t have become a healthcare provider.  Thanks to the majority that do their job proudly and don’t whine in hopes of getting pity.

And as to us real estate appraisers arguing that what we do is essential….really?  An appraiser friend in Puerto Rico said they ruled it wasn’t essential.  I agree.  Albeit, I was happy the appraiser came out and appraised my daughter’s farm today so hopefully her closing will still occur in 2 weeks:)  But, truthfully, this isn’t an essential service.  Closings can be pushed back 2-3 months like everything else.

Enjoying life on the 5/3 Farm…..til Wednesday evening….be safe and stay well.

The Mann

MORE TIDBITS OF REAL ESTATE MARKET INFORMATION

March 26 – One of you shared this with me.  Good info and it seems to put a definitive range on expected loan losses for CRE loans.  When two different methods come up in the same general range that can provide some confidence in the forecasts.

·         Commercial real-estate loans made by banks will suffer as much as a 2.5% loss rate over the next five years, according to the analysis of 12,500 loans now on the books of banks ranging in size from small community banks to the largest banks in the country. If that were applied to the $2.3 trillion of outstanding commercial real-estate bank loans, then losses would amount to $57.5 billion, Trepp says.

·         The Fed’s own stress tests of banks capital adequacy assumes a CRE loss rate of $65.7B.

·         Loss rates last year were less than 0.1%.

·         Between 2008 and 2011, the peak default rate was 4.4%, according to Trepp. That default rate will hit a peak no higher than 2.7% in the expected Covid-19 downturn, Trepp said.

·         Defaults this time probably won’t soar so high partly because bank portfolios were in relatively strong shape leading up to 2020.

·         Hotels and shopping centers will likely be the hardest-hit property type with cumulative default rates over five years of 34.8% and 16%, respectively, according to Trepp.  Apartment buildings and industrial property will be hurt the least with respective default rates of 3.3% and 3.0%, the analysis said.

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On a different issue, I heard a nice, concise explanation of how large of a bailout is needed in the USA.  Last year, our GDP totaled $21.44 Trillion.  If 2Q GDP falls 25% to 35% (or pick the number you like), then the bailout will need to be $5.4 to $7.5 Trillion.  The various bailout Acts passed by Congress and the purchases by the Fed are heading towards that range.

What I don’t get is the backside of this decline.  As of today, annual GDP projections for 2020 are around -3.0%.  That would indicate an annual economic loss of less than a trillion dollars.  So, how is the Fed and the US Government going to get  back $4-6 Trillion they lend out?  I doubt they will get much back.  We basically increase our overall debt many fold.  Of course, even these amounts are trivial compared to the $100 Trillion+in unfunded pensions, government handouts, and so on.

Another video I was watching (Hidden Secrets of Money – Part 1…the series is on YouTube.  I highly recommend viewing it.) said a researcher found 600 (!!!) fiat currencies in history that began with the letter A and was half way thru the B’s when he stopped.  All 600 currencies went to Zero.  The point being the US Dollar and all other existing currencies won’t be exceptions.

Lastly, I am seeing numerous predictions that many countries will totally disappear in the upcoming years.  That may seem surprising. But, go back to an atlas of 1900 and see how many countries no longer exist in 2020.  So, I guess I won’t be surprised to see dozens of countries get ate up by their neighbors.  That was the norm throughout history until the past 70 years.  We have lived in an anomaly that has come to an end.  I think the only good thing for us in the Western Hemisphere is that most of the changes will occur in the Eastern Hemisphere.

The 1920’s were the Roaring 20’s.  That term might apply again to these 20’s, but for a different reason.  Some aggressive countries will be roaring as they take over their neighbors.

Enough cheerful news for today.  Everyone be safe.

The Mann

THIRD PARTY INSPECTORS & USPAP

MARCH 24 –  I wanted to share with everyone an excellent post about the above topic.  The Appraiser Coach has given me permission to re-post his article on my blog.  I am thankful for that.

Their website is https://theappraisercoach.com

Instead of cutting and pasting the entire article, the link is https://theappraisercoach.com/do-third-party-inspectors-violate-uspap/

I hope you enjoy the article and their website.

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My quick opinion on the matter excluding the USPAP issue (no doubt USPAP allows 3rd party inspectors, in my opinion).

Since 1993, I have NOT inspected any property I have performed an Appraisal Review (where I opine to value by either agreeing with the appraiser or coming up with my own value) or Evaluation on.

For Appraisals, the appraiser has already done that inspection and provided all the description I need to see.

For Evaluations, the past 10 years we have used a national firm to provide inspections.  They do a far better job than any appraiser I know of.  Clients love the inspection report we include in Evaluations.

The point is this has been going on for 25+ years.  More and more appraisers realize it is not good use of their time to be doing the inspection.  They serve their clients better by concentrating on the valuation analysis.

Lastly, the common concern I see regarding hybrid appraisals (again, maybe new to residential appraisers, but 25+ years in existence for commercial appraisers) is the quality of the inspection.  As I note above, the inspection report we have obtained is done by people more qualified to do such than most appraisers.  I agree, the level of competence of the 3rd Party Inspector must be addressed in order to avoid problems.  It can be addressed.  The GSEs just need to do it in advance.  Not after problems occur.

Stay safe.  Enjoy time with your family.

The Mann

THE MARKET ENTERS THE PREDICTED RANGE

UPDATE MARCH 27 (EVENING) – The DOW peaked at 22,595 on Thursday.  That is within 100 points of my target.  I’ll be surprised if my third forecast target in a row is this accurate.  But, if so, I’ll take it.

I will revisit price targets for the upcoming low next week.

The way the waves are looking the following should occur:  The US Dollar will rally to new highs short-term, Gold will fall below $1050-$1250 longer term, Silver will decline below $8 longer term. and stocks will fall 30% from current levels short-term.  How all of that happens I have no idea.  But, that is what I see happening.  I never ask why or how.

The $2+ Trillion stimulus bill was signed today.  And the DOW was down 915 points.  The markets already have priced in all of the stimulus that will be thrown at the country ($6+ Trillion).  They are looking at where we will be this Summer or Fall and they aren’t happy with what they see.  I am guessing they are pricing in the virus coming back in the Fall and Winter.

Regarding Oil, I did get a reply from the experts at Elliott Wave International.  My thoughts that the combination 120-year bull and bear market might well be coming to an end are on target.  Obviously, it is rare to have such an opportunity occur in a our lifetime.  There is an issue regarding the length of this bear market (timewise).  I need to analyze the 120-year move in a bit more detail to see what I can figure out.  I will keep you posted.

I have a gripe about healthcare providers complaining about going to work….about being on the front lines and subject to getting the virus.  Seriously?  Did you think you would take care of sick people and not encounter a contagion?  Geez, too much complaining about having to work nowadays.  Just do the job you chose as a career.  Be proud that you are helping people.  You have a chance to help others and change the course of history.  Stop complaining.

Oh, I do hope GM cans their CEO.  Trying to make a killing off of this crisis is obscene.  Like him or not, Trump is great at not letting anyone screw over our country.  I am glad he invoked the Protection act and I do hope GM doesn’t get a dime for the respirators they will make.  To think we bailed them out last time around….and this is the thanks we get.  I will never buy a GM product.

Til Monday evening…stay safe.

The Mann

UPDATE MARCH 25 (EVENING) – The DOW rallied to 22,020 today.  It has satisfied getting to the range of a top for this counter trend rally.  It then fell almost a 1,000 points in the final 5 minutes due to Bernie Sanders threatening to hold up the bailout legislation.  It cannot be ruled out that the DOW could rally back above 22,020.  But, once a target range is satisfied, I start concentrating on the next wave – which is down to 13,900 to 15,400.

For trivia, this was the best 2-day rally since the 1987 crash.  And I think it was the first consecutive up days in a month.

Gold backed off its rally quickly.  Oil is starting to get its legs back.

Hopefully, Friday evening the waves will be telling us more.

Regarding real estate, early info is saying that buyers are asking for a 5%+ reduction in price on existing contracts.  That isn’t all buyers.  And that isn’t much at all.  Starter homes continue to sell well.  National Tenant Lease properties are in demand as a flight to safety.  Since these are really corporate bonds, and not real estate, this makes a bit of sense.  Of course, the question is do these buyers know what kind of downgrade the corporate bond rating will get for the tenant in the property they are looking at?  Or are these unsophisticated buyers just looking for anywhere to put their money?

Please share anything you are hearing regarding real estate prices, cap rates, closings falling thru, et al.  Til Friday evening…

The Mann

UPDATE MARCH 24 (EVENING) – I was going to post this regardless of today’s outcome.  But, worth noting today was the largest up day since the depths of 1933.

Most, if not all, analysts never state what could occur that would show their forecast to be wrong.  Flat out, if the DOW rallies above 24,200 my interpretation of the wave theory will be wrong.  Technically, it would just mean the waves were showing something else was happening.  But, to me, I say I am wrong.

I did some analyzing today and thought this rally would terminate around 22,500.  Bob Prechter’s firm put out their analysis this evening and said about 21,200-22,100 should be the top of the range.  The main point is this rally absolutely cannot go above the late February low around 24,200.

Some additional analysis suggests that 15,300-15,400 is really looking good for the final bottom (i.e. for this first ‘A’ wave of a Bear Market….wherever this low occurs, it should be broken down the road after a significant rally occurs).  But, a lower target of 13,900 showed up so I would have to update the ‘final’ bottom range to be 13,900-15,400.

So far, the 27,100 top forecast for Wave 2 of the decline was almost exactly on target.  And the 18,200-18,400 range for a possible appears to be for Wave 3 of this decline.  Both have been right on the money.  I suppose my luck will run out soon:)  Albeit, I usually do excellent in a major downturn, so we shall see.

22,500 for the top of Wave 4 and 13,900-15,400 for the bottom of Wave 5 of ‘a’ are up next.

I need to confirm with Mr. Prechter something I am observing regarding the Oil market.  It is significant, so I hope to get his thoughts on the matter.  Sam Zell said he bought some energy stocks.  If what I see occurring in the Oil market, per the wave theory, is accurate, then we might have an opportunity like that of the stock market in April 1933.  Will keep you posted on this one.

Oh, the $200 Gold rally in two days is due to people suddenly realizing they can’t buy the physical product anywhere.  I use KITCO and they are all but sold out.  However, the wave theory allows for this rally to still be part of the larger decline below $1056.  No change of thought on that forecast because of these two days.

Stay at home.  Be safe.  Enjoy time with your family.

The Mann

MARCH 23 (EVENING) – A fairly calm day in comparison to the past few weeks.  The Dow bottomed below 18,300 today.  It thus, entered the 14,600-18,400 range I forecast when it was around 25,000.

My analysis of the waves is very much in sync with others.  I would say there is a 25% chance of a significant bottom occurring between the 17,000’s and today’s low and a 75% chance of a bottom occurring in the 15,400 range.  This latter figure has significant support as bottoms in 2015 and 2016 occurred around this figure.  With both the waves and chart support suggesting 15,400 as the low, this figures gets greater weight at this time.

It is amazing to hear predictions of -30% to -50% for GDP and up to 30% unemployment.  If these figures occur, we will have blown away The Great Depression and The War of Northern Aggression (aka the Civil War for those north of the Mason Dixon line).

TRIN is at 0.82 is incredibly far from signalling a bottom (1.60+).

VOO is at about -$2.5 Billion for last week.  I would need to see -$10 to -$20 Billion to know the public has thrown in the towel.  Or maybe several weeks of -$10 Billion at a minimum.

For those interested in Corporate Bonds, I was introduced to an indicator to watch.  First, about 40% of Corporate Bonds graded BBB (lowest investment grade before becoming junk bonds) are expected to be downgraded to junk.    Keep that in mind regarding current ratings.  Remember, rating agencies are almost always BEHIND the curve with their grades.  They will finally lower their ratings once all of the decline has occurred.  They get paid for such hindsight.

Back to bonds….as long as the ETFs are trading at a discount to their NAV (Net Asset Value), the market is saying prices aren’t low enough, yet.  I will follow ticker symbol BND (Vanguard Total Bond Market Index Fund).  It is currently trading at about a 3% discount.

Regarding Corporate Bonds, does anyone have a source that shows what is out there and what their prices are?  Barron’s and the WSJ used to list all of them in their papers.  But, they don’t do that any more:(  If you know of a site that has this info, please share it with me.  Thanks.

We shall see what the next two days bring and I will be back Wednesday evening with an update.

Stay safe.

The Mann

JUST ANOTHER RECORD BAD WEEK

MARCH 20 (EVENING) – I had thought the markets had calmed down and it wasn’t much of a week.  Then I read this was one of the worst weeks since 2008.  I thought last week was.  Or the week before that.

I don’t have much to add to my lengthy post two evenings ago.

New lows should be set next week.  The question is will we have the largest declines to date – which would see more 3000 point down days.  Or will this be a moderate decline.  It is tough to see the DOW taking on another 3000 point down day or two.  But, …..

In trying to fine tune a range for a bottom, nothing has changed the 14,400 to 18,400 figures.  But, 15,500-15,700 is now looking good for a more precise bottom.  As I said initially, I think the low will be towards the bottom of the range.  I just can’t see us having an intermediate term bottom above 17,000.

The subsequent rally should return to the 21,000 area.  I didn’t think much about that, but then I realized that could be a 40%-50% rally.  I guess that isn’t something to sneeze at.

But, first let’s get down to the bottom.

VOO did have -$1.3 Billion this week.  So, it moved to the outflow list.  But, for the week investors poured over $6 Billion into stock ETFs.  This is insanity as the market crashes.  When tens of billions of dollars of funds are being taken out of stock ETFs we will be nearing a bottom.  We have a long way to go.

Remember, no need to be alarmed about the number of China Virus cases soaring for the next 4 weeks.  Experts say the cases should peak out by the end of April.  When optimism kicks in at the cases leveling out and then declining, don’t get carried away.  We are still in a major economic downturn that has only just begun.

For those looking for some perspective re the virus.  Wuhan had its first case on November 17th.  This week no new cases were reported in all of China.  From nothing to nothing in 5 months.  I forget when we had our first case – mid-February?  5 months gets us to July.  But, we got on top of this earlier than China did and the virus doesn’t like temps above 80 degrees and Summer is coming.  So, things are looking real good for the USA to be working on wrapping this virus up in May and June.  Let’s hope, eh.

Regarding real estate….I have heard that renters are leaving apartments to go to rental houses.  Less chance of catching the virus in a freestanding house.  Also, people are recognizing what I have been screaming about for decades – big cities are dense and it is easy for a virus to spread to the masses.  Ask the Big Apple about that!  Suburbs and especially rural areas are where people need to move to.  The jobs will follow.  The decay in our largest cities will accelerate as crime festers, diseases run rampant, homelessness gets out of hand, taxes are too high, traffic is a nightmare, on and on.

Thanks to those that have sent me information to look at.  I have found several new sources I will follow.  I truly appreciate it.

We just got our first known case of the virus in Aiken today.  We shall see how it plays out locally.

Learn to enjoy time at home with the family….like we used to before the internet ruined everything.  Put a dent in those honey-do lists:)  I know I am getting a lot done around the farm.

Stay safe.

My next update will be Monday evening.

Godspeed.

The Mann

THE DECLINE IS NOT COMPLETE

MARCH 18TH (EVENING) – The DOW closed below 20,000 for the first time since 2017.  Today’s low was 18,917.  Nothing occurred in the last two days that would change my range forecast for an intermediate bottom.  All I can say is further declines are ahead.

And this is a way too long post.  But, I had lots of things on my mind:)

I saw an indicator that may be useful in telling us when an intermediate bottom is occurring.  I will share this one with you so you can follow it yourself.  Go to this web page:

https://www.etf.com/etfanalytics/etf-fund-flows-tool

There is a table for the Top 10 Creations (aka inflows, people buying) and Top 10 Redemptions (aka outflows, people selling).  Then look for the Vanguard S&P 500 ETF (VOO).  Incredibly over the past two weeks people have BOUGHT over $12 billion of this ETF.  In the first phase of a Bear Market, the public buys the dip thinking the market will rally back to new highs.  This is when the Smart Money sells their holdings to the public so they get caught holding the bag as Joe Granville would say.  When you see VOO in the Redemption column, then we might be near a significant bottom.  When VOO is being sold in HUGE amounts then we know the public has thrown in the towel and never want to own stocks again.  Remember that for every transaction there is a buyer and seller.  So, when the public finally caves the Smart Money will be buying everything the public dumps.

Another indicator many traders follow is called TRIN.  I won’t explain it here (I am sure somewhere on the web it is explained).  But, amazingly, this indicator is at a level seen at market tops.  Not market bottoms.  Like VOO above, there is massive buying going on.  There is no panic.  All the way down people have been buying and buying.  In fact, two friends told me their advisors said to just keep buying as the market declines.  Those advisors get paid for such brilliant advice:(  For those who know about TRIN, when we see 5-day average readings over 1.60, then we start looking for a bottom to occur.

Some items of note.  As of today you can pay the government interest to hold your money for 4 weeks to 3 months.  Negative interest rates have arrived in America.  I do hope banks will soon pay us interest on the loans we get from them:)

I saw this information from an automobile expert and wanted to add Auto Dealerships to the list of commercial properties that will likely see significant closings and bankruptcies.  If all auto dealerships are forced to close (like many other retail establishments….and supposedly one state has required dealerships to close, already) for 1 week, it will cost the car industry $7.4 billion and 94,400 American jobs.  The government will lose out on $2 billion in taxes.  But, that is now insignificant when trillion dollar bailouts are being handed out.

Remember that is only one week of closure.  As we have seen, closures are much longer than that.  Banks need to be looking at their floor plan and real estate loans immediately.  As I have tried to explain for almost 30 years, an auto dealership is never the highest & best use of a site.  It is an interim use from the day it is built.  This special purpose property type is going to result in a lot of losses for lenders.  It is time to get those loans in order.

As for auto stocks, it is likely all of them will go bankrupt.  If I recall right, only Ford did not go bankrupt in The Great Depression II ten years ago.  I wonder how the people that bought the great Tesla stock at $969 feel with it hitting $350 today.  I wouldn’t be surprised to see it fall another 50% and hit a new annual low below $175.

Almost no one pays attention to parabolic patterns and what happens when they occur.  I learned about this from one of my idols, Joseph Granville, back when I was a teenager in the 1970s.  Essentially when something has a blow off parabolic rise it gives up the entire gain when it crashes.  Or at least say 85%-95% of its gains.  There are probably hundreds of stocks that have graphs showing a parabolic rise and this subsequent crash.

Oil crumbled right thru $25 and bottomed near $20 today before having a dead cat bounce back to $23 at the close.  I believe it was yesterday that Morgan Stanley said that oil would hit $30.  It closed at $28.  They get paid the big bucks to provide such wonderful advice:)

As for the China Virus, an American in Wuhan said only one new case has occurred in the past week.  Wuhan is basically back to normal.  And China did nothing like the USA has done to slow this virus down.  So, I am wondering if a month from now we will see optimism as the number of cases rolls over and starts to decline.  Maybe Tax Day will have a bit of silver lining.  The next two weeks will be bleak as the number of cases soars due to tests finally occurring.  But, a month from now we may see a light at the end of the tunnel that is not a train coming at us.  Always think ahead.

A few side thoughts.  First, this crisis should set globalization back many decades.  I think countries, especially America (finally!), realize the importance of not relying on other countries for critical goods.  Of course, most countries are small and have no choice.  But, for America to let Asia take over production of so many items is (you fill in the word).  Because of globalization the average American wage has not increased for 50 years in real terms.  It is all about greed – corporate greed and individuals having the desire for everything they buy to  be cheap (or even free!) but wanting to get paid more and more.  We can’t have it both ways.

Second, the China Virus might have finally made telecommuting a significant reality.  25 years ago my MBA group wrote a paper that telecommuting was not going to take over as was being projected at the time.  The experts were saying that by the Year 2000 most people would be working at home.  We argued that the human species was a social animal and wanted to deal with each other in person.  We were right.  In the past 5 or so years many companies have changed their policies and required all employees to come into the office.  It might have taken an annoying little virus to finally make working from home go mainstream.

I wanted to give a shout to a few friends (not by name).  One told me a month ago to get ready for martial law.  I believe his prediction will come true any day now.  Even the California Governor said today he has the right to invoke such.  I believe the ONLY way to stop this virus is to lock down the entire country.  People just aren’t listening to what they are being told to do.  Of course, the leftists will say yep we told you Trump wanted to be a Dictator:)  As Ron White says, you can’t fix stupid!

Another friend said he bought some S&P 500 Puts and was up 10x.  That was yesterday, so he is up more after today.  It is good to know someone plays the downside.  Options are extremely difficult to trade.  It is pure gambling (as my mentor said, the stock market is the world’s largest casino).  I would not recommend trading options to anyone.  You can buy ETFs that are short the stock market or industries or many things.  And there are 2x and 3x ETFs that will magnify the move by those factors.  Unlike options, ETFs do not have time decay working against them.

It is always easier to make money in a Bear Market than it is in a Bull Market.  But, 99% of the public never plays the downside.  And every time we have a Bear Market people start screaming to make short trading illegal.  Too funny.  It is ok for insane buying to push markets to unsustainable levels.  But, it is not ok for people to push the market back to fair value and then down further to bargain levels.  Stop complaining and learn how to play the game or get out.

Some of you have passed along information on the few people that predicted this downturn in advance.  I sincerely appreciate it.

As for investments, I obviously cannot give any specific advice.  This blog just provides my thoughts for all to see.  It helps me get things in print.  It reminds me of things to watch for (like VOO and TRIN).  And it actually does help some people with their investment decisions.

Thankfully, my wife and step-daughter listened last August/September and let me put their retirement 100% in cash.  I think the only time they listen to something I say is when it is about the stock market:(  They missed the last 10% of the Bull Market.  But, they have had no worries in this crash.  And we have enough toilet paper, so no worries outside the market either lol  As I tell people, I do follow my own advice with my investments.

Lastly, my step-daughter is selling her horse farm (hopefully, it closes in 3 weeks).  Great time to sell.  She has been looking at houses to buy right away.  I am thinking she might want to hold off until Fall.  By then, many local businesses will have failed.  Few people will be buying this Summer.  Sellers should become desperate.  I am seeing my thoughts about residential real estate start to form as I write this.

I remember the only good buy my wife and I ever made was in 1992 when we saw a house for sale in a neighborhood we liked.  Doing some research (before the internet was used for such) we found out the owners were losing the restaurant they owned and needed to sell and move in with their parents.  We offered almost 20% below the list price and our realtor said don’t hold your breath.  We said give them the offer and tell them they have til 11pm tonight to make a decision.  We got a call at 10:30pm that they accepted the offer straight up.  Every other house we ever bought we lost money on:(  Typical of many of us appraisers eh:(

Don’t be afraid to buy low.  It is the best way to make money:)

My email is GeorgeRMann@Aol.Com

Yell anytime.  Pass my blog along to anyone you want.

Please stay safe.  Take extra precautions for the elderly and sickly.  Go out of your way to buy what they need for them so they don’t have to go out in to the public and risk their lives.  Remember to sanitize everything you do buy for them before they touch it.

It is better to give than to receive.  Pass it forward.

Godspeed

The Mann

EXTRAORDINARY ASSUMPTION ABOUT CORONAVIRUS

MARCH 16TH – I am seeing appraisal reports that have added an Extraordinary Assumption about the coronavirus.  I was asked today by an appraiser if he should add such to his reports.  My answer is Yes.

I won’t cut and paste what I have seen in reports.  That wouldn’t be cool – and not ethical really.  You can come up with something quickly.  I would add this immediately.

The Mann

DID ANYONE ELSE FORECAST TODAY’S FIRST-EVER 3000 POINT DECLINE

MARCH 16TH (EVENING) – I am curious if anyone has seen anybody else predict that a 3000 point drop in one day would occur asap.  Please email if you saw someone do such, as I like to keep up with such people who know how to forecast well.

For those new to my blog, there are two additional posts on this topic that will catch you up on how things have been playing out.

Please feel free to pass my website along to others.  Although the short-term future is bleak, having a clue of what is coming helps alleviate the fear of the unknown.

Like The Great Depression II, this downturn has been easy to forecast.  Hopefully, it will stay that way.

I mentioned that 14,600 to 18,400 is looking like a likely range for a bottom of some type – not sure, yet, if it will be an interim or final bottom.  Interim seems more likely.  With more information every day the market plays out, this range can be narrowed.

After today, I would narrow this range to 15,400 to 18,400.  Also, there is a low-percentage chance of an interim bottom occurring in the 17,800-18,200 range.  If a bottom occurs in that range, the rally will reveal if that is an interim bottom or just a temporary stop on the way down to an interim bottom.  The odds are higher the market will decline thru 18,000 towards an interim bottom a few thousand points lower.

I would not be surprised if we get down to 18,000 tomorrow.  The markets are moving that fast.  By the way, the volatility of the last 3 days last occurred in 1929.

The decline in Oil is just ahead of the stock market.  I haven’t tried to come up with specific targets in this market.  But, I am thinking an interim bottom is forming in the $25-$30 range.  This should be followed by a rally to $40 and then a decline back to a major low in the $25-$30 range again.

I still think it is too early to buy stocks.  Especially when we are still in the midst of a Wave 3 (various degrees for those who follow wave theory) and Wave 3 is the most severe wave.

A side note…for the first time in history T-Bill rates briefly went negative today.  Simply amazing the number of people worldwide willing to pay sovereign governments interest.

More of a note to myself, if Gold is truly in the last wave of a major Bear Market, then the target range is $829 to $928 an ounce.

Stay safe.  Remember President Kennedy’s great quote:

Ask not what your country can do for you — ask what you can do for your country.

All 320 million of us are in this virus fight together.  Do your part and this will be over sooner than later.

Godspeed.

The Mann