Category Archives: Mann Overboard

After a 2-year hiatus, the Mann Overboard blog is back. This blog will cover anything and everything that comes to mind. There will be market forecasts. Suggestions regarding interesting web sites, books, or topics I think readers should check out. My continual diatribe on the real estate appraisal industry and all of its wrongs. My support for a new real property valuation profession, adopting Mortgage Lending Value in America, creating Real Property Risk Ratings in America, and introducing readers to the concept of Socionomics. Other topics will surely arise.

Feedback will be limited to approved site visitors. This is not to limit disagreement – different ideas are needed for us to advance any concept we discuss. I just want to keep the content professional. Replies whining about old subjects like AMCs and what banks have done to the industry and such don’t get us anywhere. And simpl

BUY TO THE SOUND OF CANNONS AND SELL TO THE SOUND OF TRUMPETS

MARCH 5, 2022 – A friend shared the above quote by Baron Nathan Rothschild. Nowadays we say buy the rumor and sell the news.
Just as the time to buy oil and gas and all commodities was 2 years ago during the worldwide lockdown. Soon will be the time to buy Russian assets.
I recall people saying I was crazy to buy when oil traded at -$30 a barrel (no one gives credit to President Trump ordering the USA to stock up its oil reserves when the price of oil was so cheap…brilliant move). Exxon traded at $31 (over $84 yesterday). Freeport-McMoran I had bought around $6. Yesterday it broke $50. With virtually every commodity at record highs, I will start to slowly take my cards off the table. You sell when everyone in the world is wanting to buy. As is the case now and for awhile longer.
The challenge will be figuring out when to buy Russian assets. And which ones. Russia isn’t going away. Their oil and gas will be needed by Europe, and others, for the remainder of this century. 25% of the world’s wheat goes thru Russia/Ukraine (that is why the price was up 40% this week!). Even if Russia/Ukraine is limited to trading with China, Iran, Venezuela, Cuba, and other members of that alliance, their companies will come back and do well. China alone has enough people to buy Russian goods forever. Remember, Russia’s economy is only the size of Italy’s. It doesn’t take much buying to support that economy.
The key is figuring out which companies and ETF funds will survive. I remember in early 2009 when Fifth Third Bank traded at $1.01 and I believe Bank of America was below $5. The fear was these banks would not survive. But, if you knew they would survive, you had minimal downside risk. As we say, at those prices it is like buying an option. You are prepared to lose 100%. But, also prepared to hit a 5x or 10x winner.
We are in a similar period for Russian stocks and other stocks invested in Russia. I don’t have definitive answers, yet. But, I think I am getting a handle on what to watch for re the Smart Money. The Smart Money will be investing heavily long before the public, and Fake News Media, know things have turned the corner.
I have long thought about writing a paper about markets that have declined 75%-90%+ and bounced all the way back. Those opportunities occur enough for you to make large killings throughout your life. The key factor is KNOWING that market will survive. The DJIA was going to survive The Great Depression. It declined 89%, but it was going to stay around and rebound. The NASDAQ did about the same in the Dot Com Bubble. There are dozens of such events. There are lots more where the stock went 100% under and did not survive. Again, the key is KNOWING the asset will survive no matter what.
If you are crazy enough to want to invest in depressed Russian assets, stay in touch with me. I am not 100% certain I will dive in. But, I do know this is a rare opportunity to keep an eye on. Rare because many of these assets are down 99% right now.
And, yes, you can tell I am totally against companies boycotting Russia. I have always said corporations owe society nothing. If you want something to help society, that is what Not-For-Profits are for! Corporations need to stay out of politics. In fact, they should be banned from donating to political campaigns. Just make money for the owners, pay your employees, buy supplies from other companies, et al. All of that done ethically and within existing laws, of course.
Albeit, I would say the Russian people are lucky right now to have no Facebook and Instagram and so on!!! That is a dream world! Can you imagine if your kids had no social media to waste their lives on!!!! Your kids had to spend that time with you:) I have a dream….
These are times I live for. I look forward to seeing how this evolves. And possibly, making money off of it:) We shall see.
Shalom,
The Mann

$120 OIL – WHAT A BEAUTIFUL SIGHT :)

MARCH 5, 2022 – Just two years ago oil futures traded negative for a day and the tree huggers said oil was dead. Of course, I disagreed and predicted we would see $200-$300+ oil in this next cycle.
The first super cycle lasted about 120 years and saw a peak around $150 and then a drop back to where it all began in the early 1900’s.
A new super cycle began in 2020. This should take us to all-time highs and also end the history of oil. At the end, oil will likely trade for $1 as no one will be using it. ((see the history of aluminum prices in the 1800s – In the mid-1800s, the first aluminum ingots on the market went for $550 per pound. Fifty years later, not even adjusting for inflation, it cost 25 cents.))
I am not saying we will see $200+ in this current up move. It will more likely occur a decade or more into the future. This next cycle should last the remainder of this century.
Someone, please let AOC know what the price of crude is today:)
For those of us that own Exxon Mobil and other Big Oil and mineral companies, life is soooo sweet. Thanks to the climate change Fake News people for driving prices sky high. Sadly, they just hurt the poor with their stupid green agenda.
An ending fact….The Keystone XL pipeline will send the USA over 800,000 barrels of oil a day. We buy 595,000 barrels of oil a day from Russia. Thanks to the USA and Europe for funding Russia’s war in Ukraine! As an aside, I reviewed an appraisal of the Keystone XL pipeline and not a single landowner (!!!) complained about the pipeline going through their property. Only the climate change Fake News people complain.
Viva La Crude!
Shalom,
The Mann

GAS VERSUS ELECTRIC VEHICLES

FEBRUARY 7, 2022 – This is an excellent article comparing the two types of vehicles.  
Do Electric Cars Pencil Out? – EPautos – Libertarian Car Talk (ericpetersautos.com)

Of course, there is a lot more damage to the planet from using huge amounts of electricity as hundreds of major power plants will be needed to address the increased demand.  And most of the plants will have to depend on oil and gas.  Keep buying gas only vehicles if you want to help the planet.

Shalom,
The Mann

SAVE OUR PLANTS, INCREASE YOUR CARBON FOOTPRINT

FEBRUARY 1, 2021 – I have spent my entire life increasing my carbon footprint.  When a friend mentions something like buying an electric vehicle, I get in my 1996 Ford 250 gas hogging truck and just drive around for a few hours to burn as much gas as I can.  For whatever reason, I have always been anti-environment…maybe because the tree huggers have just been so annoying about the issue.  I have long joked that there is lots of room on Mars for humans when we need to go there:)

It is good to finally see some studies come out to support an increase in C02 emissions.  Afterall, plants live on CO2.  Carbon neutral would be the death knell for this planet.  Thankfully, humans will continue to increase their CO2 emissions and save this planet – just as they have for the past 200 years.

Studies project the number of automobiles will increase from 1.2 billion today to 2.5 billion (!) by 2050.  98% use gas and diesel today and it is expected over 90% still will in 2050!  Wow, that is going to be an amazing increase in C02 from vehicles alone.  Add to that increasing online purchases and delivery vehicles will increase exponentially – even more CO2.  I can hear the plants saying yum yum:)

I saw this in a recent Grant’s Observer:

Bloomberg Opinion’s Lionel Laurent shines a light today on the environmental cost that has accompanied the bitcoin boom:  As the digital ducats require increasing computational firepower to process transactions, bitcoin’s current estimated annual carbon footprint of 367 million tons is equivalent to the emissions of New Zealand, while a single bitcoin transaction generates CO2 equivalent to more than 700,000 swipes of a Visa debit card, according to Digiconomist.  Similarly, the crypto’s annual energy consumption stands at about 78 terawatt-hours, up from less than 10 terawatt hours in 2017.   Then, too, bitcoin hunters have utilized global regulatory arbitrage to improve their economics.

That alone should encourage everyone to invest in Bitcoin!  Just think how many jobs are created worldwide to produce this amount of power.  And the profits being made by power plant builders and power companies.  Definitely a win-win for people and plants.  I suppose the 300-500 coal plants under construction and proposed worldwide just sends an environmentalist in to disbelief that his/her plan to kill off plants and humans has zero chance of succeeding.  Nothing like wasting time fighting a fruitless battle:)

I do find it funny that the young generations that are so in to a green economy are the ones that are greatly increasing CO2 emissions thru online retailing and cryptocurrencies.  As they would say, I am SMH.

I encourage everyone to read and pass along Dr. Moore’s, co-founder of Greenpeace (!), study on C02 and more throughout the history of our planet.

Greenpeace Co-Founder Contradicts CO2 Climate Fears

It is neat to imagine a time when humans were thriving when CO2 was over 10x higher than it is today.  As Dr. Moore points out, if we hadn’t started the Industrial Revolution and invented the automobile, it is likely plants and humans would be extinct in the not too distant future.  If the ‘we were wrong about global warming so let’s call it climate change’ people had their way, they would eliminate the lifeblood of plants and lead to the end of the human race.  The evildoers can be stopped by you simply doing your part to increase your carbon footprint.  Please do your part!

Another neat thing to imagine is when humans were thriving in temperatures that were more than 20 degrees Celsius warmer than today.  I suppose we were living all over the planet as there weren’t glaciers and such that were too cold for us to survive in.  To think the scare mongers are worried about a one or two degree increase this century.  From a historical perspective, it will still be very cold.  Brrrrr.

Save a Plant, Increase Your Carbon Footprint!

Shalom,

The Mann

 

 

 

STUDY CONCLUDES THAT APPRAISERS ARE NOT BIASED

JANUARY 8, 2021 – The American Enterprise Institute has published a study about the possibility that appraisers have intentional or even unintentional racial bias.  Their conclusion is:

We conclude allegation that knowing the race of the applicant results in racial bias by appraisers on refinance loans is uncommon and not systemic. This same analysis supports the conclusion that unintentional bias based on race is also uncommon and not systemic.

You can find the article and link to the report at:

How Common is Appraiser Racial Bias?

It would be nice if the racially biased Brookings Institute would issue an apology to the appraisal industry.  But, racists have an agenda and do not apologize.  Thankfully, there is access to actual data and entities like the AEI can analyze and report the facts.

Basically, it is simply impossible for the appraisal industry to be racial or gender biased.  Probably 99%+ of the time appraisers know nothing about the physical characteristics about the borrower in residential transactions.  Also, every appraisal report is reviewed and I would say near 100% of the time the reviewers know nothing about the borrower at all.

AVMs are often used in the residential arena and they know nothing about the borrower nor the subject’s neighborhood, et al.  To them, data is data.  Finding the best comparables is based on analyzing numbers.  That simple.  And for the most part, it is the same for human appraisers.

There is one group of people in real estate that can have significant bias.  I won’t name them.  You can probably figure it out.  There might actually be a few groups involved in this arena that can have bias.  That is not to say it is widespread and rampant.

For those who want to keep the ‘conversation’ going, provide the AEI report.  You will see how fast the other side wants to stop the conversation and change the subject:)

Great work AEI.  I hope they will now do a study about the 20 million whites that live in poverty and see what it is about their neighborhoods that is common and how action can be taken to improve their standard of living….and housing.  At the same time, I am sure those solutions can help everyone that lives in poverty.  Remember, poverty is colorblind.

The Mann

THE APPRAISAL OF REAL ESTATE – 15TH EDITION

SEPTEMBER 26, 2020 – The Appraisal Institute has published the latest edition of the industry’s bible.  I will let them describe noteworthy items in the new edition.  See below.  You can purchase it at their website.

“The Appraisal of Real Estate,” 15th edition, is a book that fits current times. It reflects a renewed commitment to the essential principles of appraisal and the sound application of recognized valuation methodology. In addition to updated information on changes in real estate markets and valuation standards, longtime readers of “The Appraisal of Real Estate” will notice these significant changes in this edition:

  • New chapters focused on applications of market analysis and highest and best use analysis;
  • Additional emphasis on identifying the property rights to be appraised in an appraisal assignment; and
  • Deeper discussion of accepted techniques for allocating value among real estate, personal property and non-realty items.

In this book, readers will notice the expanded discussion of market analysis and highest and best use, with new chapters clarifying these important concepts and demonstrating procedures for their application. Readers will also notice the relationship between market analysis and highest and best use is made explicit and described in a step-by-step analytic procedure. Lastly, the major development in this new edition is the emphasis on the necessity of definitively describing the property rights to be appraised in an appraisal assignment to ensure that all the necessary steps are taken to produce a credible value conclusion.

Order your copy today!

GUEST POST – BY JOHN CULBERTSON, CCIM, CRE, SIOR

MAY 5th – Happy Cinco de Mayo!  Below is from John Culbertson, CCIM, CRE, SIOR of Cardinal Partners.  He can be reached at jculbertson@cardinal-partners.com.

John gave me permission to reprint this.  I totally agree with his take on this subject.  I don’t only post things I agree with – I  am open to anything that makes people think.  Of course, non-political, non-religious, no insults, et al.  I hope you find John’s thoughts of use as you hear people all over saying work from home is here to stay and office buildings are in big trouble, et al.

Stay safe.

The Mann

Dear El Cardinale,

As people get used to Zooming and working from home in their pajamas, do you think the way we work has changed forever?

– Homer

Dear Homer,

You are right in that we are likely to make some tweaks to our work habits because of the unprecedented order to work from home. However, I don’t think this will change the way we will work in the future.

To start, new habits are hard to form. Research shows it takes 21 days of conscious, enthusiastic, and consistent effort before a new habit is formed. I’m what I call a habit cultivator, and I know how difficult it is to create new ones. To some extent, the degree to which our working habits change will be tied to how long it is before the all-clear whistle blows.

There also are other factors to consider.


  • The fiefdom. The physical office is where the boss is, and he or she often likes his or her fiefdom. The person that pays your salary likes to see employees busy at work. Your employer also has a huge commitment to that fixed cost of the office that they don’t want to see wasted.



  • Long-term commitment of office space. Office leases are usually seven years long on the short end, with facility expenses usually being one of the top three expenses for any company, this represents a sunk cost that the company is going to want to use as an asset.



  • Lack of suitable infrastructure. I have an Asian client that is struggling now in part because they don’t have a lot of experience with working from home. Their residential areas do not have adequate bandwidth, and homes tend to be smaller, meaning less space for an office. I suspect they will return to working from an office setting as soon as their government allows it.



I view what’s happening now akin to when one takes a sabbatical. There are some occupations and cultures where every three years or so people are expected or offered the chance to take a month-long sabbatical. Some people study or conduct research in another country, while others may simply check out of their daily routine. When they come back, they may be refreshed or rejuvenated, and they may have new ideas. But typically the way they work hasn’t drastically changed.

By the way, Microsoft disagrees with me – here is a link to a deeper dive. But I am an Apple guy 😉

My suggestion is to enjoy this unexpected sabbatical that has been thrust upon us and to look forward to returning to a new normal with some new ideas and a fresh outlook.



 

 

ANOTHER WEEK, ANOTHER 8% MOVE IN ONE DAY

APRIL 6 (EVENING) – Today’s huge rally has increased the odds that this Bear Market rally has a ways to go.  The high end for the rally is in the low 25,000s.  This is beyond what I thought could happen initially.  However, the goal of this first major Bear Market rally is to convince the public that a V-shaped recovery is underway and we are headed back to new all-time highs.  A Bear Market’s goal is to get as many people in to it and then go down to a level where people don’t ever want to own stocks again.

Regarding real estate, since this market lags the stock market by 4-5 quarters it will be awhile before things become more clear.

One property type to add to the high-risk list is movie theaters.  DIsney and others had to quickly learn how to get their new movies to the public without going thru the movie theater distribution routine.  Now that they have done this, will the public be content to go back to the old way of doing things?  Forever, new music has been sold directly to the public and the public then decides if they want to go see the artist in concert.  Why should movies be any different?  Sell movies directly to us and we will decide if we want to go see them in a movie theater, also.  Will movie theaters die a slow death like drive-in movie theaters have?  These properties are certainly attractive to those seeking last mile distribution points.

Reports are that developers are moving forward with projects.  Investors may have called a time-out.  But, developers have not.

Dozens and dozens of national and regional retailers have asked their landlords for rent relief.  This puts landlords in a tough spot as their mortgage payments are obviously due each month.  A domino effect will occur with everyone helping each other.  But, there will be enough hiccups that things won’t go smoothly.

Many businesses will close up for good (one report is 30% of all restaurants in California will be closed permanently…..I would think this would occur nationwide, too).  As a result, some property owners will default on their loans.  This won’t be 2006-2011 all over again.  But, there will be enough carnage for everyone to deal with.

A former head of the SBA predicts 20%-30% of all businesses will fail.  This sounds dire.  However, I also heard that 1/3 of businesses fail every year anyway.  As always, I encourage you to do your own research.  Don’t take anything you hear as gospel – especially if it is coming from the Fake News Media!  The number of conspiracy theories grows by the day.  People (who desperately need to do something better with their lives!) are circulating reports that quote Stanford or Johns Hopkins or other such respected organizations as saying this or that.  Those are made up stories.  Go to Snopes.Com or other places to see if they address any story you think may be fictitious.

An interesting  item of note…..Amazon has their annual Prime Day on July 15th.  An internal memo says they plan on delaying this event.  That is a telling sign.  For Amazon to think that consumers will not be ready to spend, even online (!), by mid-July is extremely negative.  Keep that in mind as we hear cheerful news in May and June.

Depending on how the markets move, I may post Wednesday evening or wait til Friday evening.

Everyone stay safe and well.  Have a blessed Holy Week.

The Mann

ENDING MARCH AND INTO APRIL WE GO

UPDATE APRIL 3 (EVENING) – Thankfully, a calmer week in the books.  Nothing has changed regarding my market forecasts.

I did want to congratulate Morgan Stanley on correctly forecasting the 700,000 job losses that was reported this morning.  That was an extremely difficult forecast to make and to nail it is impressive.

Oil was up 40% in two days.  We will let it play out a bit more to see if a final low is in place or not.

It is becoming apparent that there will be some major changes in our world going forward.  Hopefully, AirBNB and Uber are dead.  Dining in at restaurants might be forever changed, too.  How do we know that someone in the kitchen area doesn’t have the virus?  Plus, the virus can stay around 2-3 weeks after a place has been thoroughly disinfected (per the Diamond Princess experience).

Grocery delivery will finally succeed.  25+ years in to its existence, telecommuting will finally go mainstream.  Executive offices (now called shared worked areas, .e.g. WeWorks) should go back away.  They are simply VIs as I have termed them – Virus Incubators.

Other VIs are apartment complexes (especially mid- to -high rise buildings) and large cities like New York and San Francisco.  The denser the population the higher the rates of crime, disease, and numerous other issues.  If people truly want healthy lifestyles, move to the suburbs or rural areas.

The changes will be interesting to observe.  Everyone continue to be safe.  Maybe next week will be more interesting regarding the markets.

Godspeed

The Mann

UPDATE APRIL 1 (EVENING) – You know you are becoming immune to the chaos when 1000 point days in the stock market are no longer shocking.   Not much to add this evening.  Stocks might be starting their next significant downturn, but it isn’t a certainty.

One thing to note is that all of the stimulus acts that are being passed are only trying to replenish what has been lost.  There is no pent-up demand.  Wealth and Output have been permanently lost.  It is a misnomer to call these stimulus packages.  No stimulus is going to occur.  The money handout is simply trying to make as many people and companies as whole as possible.

I will say that it is about time that an infrastructure act is being considered.  $2 trillion at this time.  We missed the opportunity to do that in the last crisis.  With an expected 45 million people being unemployed over the next month, it would be good to put people to work to build our versions of the Hoover Dam and TVA and so on.

I won’t bore you as there isn’t much to add to what I have already said.  It is truly tragic that we will start seeing 3000 and 4000 Americans die each day.  Amazing we will likely hit 100,000 deaths by the end of this month.  And we just surpassed 4000 today.

Hopefully, we have learned a lot from this experience.  The sad thing we have learned is that some people are plain stupid and some just don’t care about others.  But, that is nothing new for the human species.  A lot of the virus spreading is due to plain selfishness.

The upside is we have seen how good most people are.  How we help each other out.  It would be great if we continued that after this pandemic is gone.  But, well before Election Day I am sure we will be back to a hateful 50/50 split country again.  Tragic.

I will post Friday evening.  As the markets are starting to calm down (well, to me they are getting boring already), I will likely post less frequently.

I did want to thank everyone that has been sharing information with me.  The more I can absorb the better.

Please stay safe!

The Mann

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

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