A Special Port Phillip Publishing Q&A – Dan Denning and Phillip J Anderson
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March 12th, 2013
Dan Denning: Hi there, I’m Dan Denning from Port Phillip Publishing, and welcome to another one of our Strategy Sessions. Today my guest is Phillip J. Anderson. Some of you might remember Phil from our 2009 conference Australia in the Red. Phil spoke at that conference about real estate, but today we’re going to talk a little bit about everything; we’re going to talk about stock market cycles, economics, and of course we’re going to talk about the Aussie property market, which is a hot topic with our customers. So before I get to Phil’s questions and we get into the presentation, if you want to know more about what he’s doing you can go to the website, which is www.phillipjanderson.com.
Phillip J Anderson: That’s the blog, yeah, or businesscycles.biz.
Dan: Businesscycles.biz, that’s the other one. And we’re going to be talking about this book during today’s conversation. You can get it online, you can also get it in bookstores here in Australia. It’s Phil’s book The Secret Life of Real Estate. So if you’re particularly interested in the conversation about where Australian real estate comes from and where it’s headed, that’s the book.
Now, Phil’s great. He’s not afraid of controversy. So I thought it would be good to have him on because if you’re a regular reader of The Daily Reckoning or you subscribe to Port Phillip publications you’ll know that we’re probably not property bulls. But I wouldn’t describe Phil as a property bull or a bear. He’s just got a very intriguing outlook on how markets work, and that’s what we’re going to focus on today. And I think you might be pleasantly surprised that it’s a very optimistic vision of the future, not just for the property market, but for equity markets as well. So it should be a welcome dose of optimism.
But before we get to all of that I just want to go over a couple of number with you Phil, because I think we have picked an auspicious day to record this presentation.
Dan: Today the Dow Jones Industrials closed higher for the ninth straight day in a row. It’s the longest winning streak for the Dow since 1996, so that’s 16 years since the Dow has done this. Of course now it’s at an all-time high of 14,455, and the S&P 500 is not far behind now. It’s 11 points away from its all-time high. And if I understand your work correctly what’s happening in the US markets right now probably has some bearing on what will happen in the Australian property market. But before we get to that, why don’t you tell our readers a little bit about economic indicator services, and yourself.
Phil: Yeah, hi Dan. I’ve always had a bent in economics, I’ve always wondered whether you can actually forecast the future, so in 1990 or thereabouts I left the business I was in, a family embroidery business, and set out on my own to do some enquiries about whether, from an economic point of view you can actually forecast the future.
When I did that I was fortunate enough to read a couple of interesting property books, one by Fred Harrison called The Power in the Land, and that book was written in 1983 that was calling for a real estate recession in the very late 1980’s or early 1990’s. And I was reading that book in 1991, and here we were, right in the middle of a recession. I thought that was interesting, so what I then did was… I’m always sceptical of a lot of what I read, so I thought, ‘Alright, I’ll examine the US markets and see if they’ve got the same sort of cycle.’ And I came across a few books that clearly demonstrated that there was some sort of cyclical behaviour in the whole economic sphere. I had lived through a big boom in Australia in the 1980’s, a really big bust in Melbourne in the very early 1990’s, so I thought, ‘Well you know, if I could forecast that I could retire early.’ That was essentially what I was trying to do. And I worked out that there’s a very clear — certainly in the US, that’s the market I studied first, but it’s obvious that Australia follows what the US is doing — there’s a very clear cyclical behaviour in the US economy. It staggers me that nobody else at the time seemed to be able to see this. So I kept on researching, I kept on studying. The significance of that was, in the very early 1990’s, again we were at the bottom but the US markets seemed to be recovering quickly. US markets in 1992, 1993 thereabouts and continuing in 1994 the US stock market, the Dow, went into all-time new highs, and to me it seemed all up from there. I remember vividly that in the early 1990’s absolutely everybody was still bearish in Australia; they were saying that property would never recover, you could never get your money back. Things were collapsing right around us. And I said at the time…because our family was involved in some property at the time, and it just looked like the American market was going to continue up. The Dow broke into all-time new highs, and away we went. From that point of view you could see that the cycles are there; history seems to repeat. And here we are today with a similar sort of thing.
Dan: You’ve mentioned this before in some of your other speeches, that economists, generally, are made uncomfortable by your theory because the conventional wisdom on Wall Street or in the finance business is the market is a random walk, that it’s not cyclical, and that you can’t interpret it that way.
Phil: Well I would differentiate a couple of things there. For people who’ve studied economics, if you go to school, you go to university, if you’ve been through the academic field… The academics themselves seem to have this opinion — in fact all the research, they say, proves it — that the market’s random. That there isn’t this cyclical behaviour, and that you can’t, because according to them all the information’s built in to markets, therefore you can’t extract any inefficiencies from it, so what’s the point of trying to forecast it? Because it’s all random. And I think that was Eugene Fama that brought that out in the 1950’s, and then Burton…
Phil: Yes, he wrote Random Walk Down Wall Street. And that myth perpetuates. But on the other hand, if you talk to market traders, the good market traders that have been around a while, and people on Wall Street, they’re much more prepared to accept, or examine, a thesis that might say they’re cyclical. Because those guys will say, ‘If there’s money in it and it gives me an edge, I’m prepared to accept that.’
So I differentiate there, but certainly the academics…they’re hopeless…and the economists, the real economists they just will not admit to a cycle at all. I think people are seeing now — and certainly your readers — it’s clear there’s some sort of cyclical behaviour. That’s the intriguing thing. The question is after that, which I was asking myself when I was doing my research, can you time that cycle, and the same thing really, can you forecast that in advance? Because if you can forecast and you can make some sort of decent timing on that you’re able to adjust your economic behaviour and your investment behaviour to take advantage of that. That’s the real key. That’s the question I wanted to ask myself when I was doing all the research. I found out that essentially, in the longer timeframes — not over a daily basis, but over a monthly, yearly basis — you can get these repeats. You can time it. And that’s where it starts to get interesting for your readers and viewers. You can start to make some decent investment decisions based on repeat behaviour that you can see in the cycle. That’s the interesting stuff.
Dan: Yeah well, it’s very interesting. If I got it right, the one that…there’s three of them that you talk about; there’s Kondratiev, there’s Gann, and then there’s this 18-year cycle. Why don’t we start with that one, and you can explain a little bit of where the data comes from, what the cycle is, and maybe after that where we are in that 18-year cycle today.
Phil: I’d even start with something that’s a bit more obvious for people. The first place I start is what’s called in the US the ‘Presidential cycle’. That’s basically a four-year cycle, and I won’t dwell on this, but I think people can see, it’s clear, that every four years there’s a Presidential election in the US, and it seems to be that the year going into the Presidential election, the President elect, he wants to get re-elected; the incumbent certainly, as we’ve seen last year. So I think behind the scenes the President will talk to the Fed, and they’ll act in concert, and they will attempt to at least make sure that growth is continuous throughout the year before the election. And you can see once the election all takes place, and whether there’s a new President or even the incumbent, the pressure’s off to maintain the growth, so they’re not so concerned about trying to keep the economy afloat all the time. Now that’s over every four years. There is, as I’ve seen with my research, there’s a bigger cycle than that. You might note that with the four-year Presidential cycle, the cycle in a sense…we had an election in 2008, but no matter what the politicians or the Fed were trying to do, 2008 was a down year. We had the similar thing in 2000, in the election there as well. So, with the Presidential elections, normally every year when there’s a Presidential election the economy’s up. We had the two exceptions, 2008 and the year 2000. The reason why you had those exceptions is to do with the larger cycle, which is the real estate cycle. The US real estate cycle in particular is what I studied.
Dan: And that’s the 18-year cycle?
Phil: That’s the 18-year cycle, yes. And when I did the book, The Secret Life of Real Estate…actually when we did the second printing we renamed it a bit, we called it The Secret Life of Real Estate and Banking because everybody was blaming banks for the downturn but actually, if you really get into the book you can see it’s not just a finance question; in the 18-year cycle it’s a land question at its heart. I won’t get into that now. But the 18-year real estate cycle as such, it’s astounded me that nobody, the US economists, the market itself, haven’t seen this more clearly, because when you study the history of the US, and I’ve done it in detail back to 1800, when you study it back there it’s crystal clear. It’s blindingly obvious. And it just amazes me that nobody else has seen this. Approximately — it’s not every exact 18 years — but every 18, 19, sometimes 20, the US markets take a huge tumble. Now, the reason why I talk to so many stock market people about real estate, and say that the stock market people should understand real estate is because, approximately every 18 to 20 years the stock market tanks, it takes a huge tumble. And the reason why it takes a tumble is because it’s a real estate led downturn. And so that’s the basic nuts and bolts. That’s the outline of what you might call the 18-year cycle.
Dan: Can I ask you one question?
Dan: You said you didn’t want to go into it, and we will go into it with more depth with your presentation — [to camera] which I’ll tell you more about later — but this is a really interesting point that you’ve made in your work, that a lot of people viewed the credit crunch as a banking phenomenon, that it was a collapse, a contraction in credit, and that’s what caused stock prices to go down. But your claim is that that actually originates with the fluctuation in land values. The expansion in credit derives from land values. Is that right?
Phil: Dan, that’s a really important point, and I’ll give you an example of why that’s so important. Cast your mind back, you might remember, in about the year 2000, 2001, just a little bit after that, we also had a credit contraction and the US went into recession just after that, but the credit contraction there, it was to do with banks but it didn’t involve the land value so much, so when we got… It was really sort of minor as well. In fact, it was really more to do with the stock market than anything else, and also the events that happened in the year 2001. People sort of panicked, which was understandable. But in that era, back in 2001–2002, the price of property hadn’t built itself up to such an extent where it was an extreme. Now bring yourself to 2007–2008. We get another credit contraction. So we get to 2007–2008, and all people can remember is the credit contraction that we had in 2001. The Fed’s like that, the President’s like that, all the investors are like that.
So they’ll say to themselves in 2007–2008, as things are tanking, the Fed will say, ‘Well, if we just manipulate interest rates, and if we pump more money into the economy, things will be fine, because that’s what we did in 2001 and it worked.’ And people by that stage, 2007, they’ve forgotten the behaviour that happened in 1991, where we had a really major downturn too. By 2007 we’d had real estate, which is in a sense based on the amount of credit that’s available, the lending from banks, it had got to such an extreme valuation that when it turned, and when it started collapsing, when that happens it doesn’t matter how much money is pumped in by the Fed, people stop buying. And so prices continue to fall. And the reason why 2007–2008 gets more serious is because when the prices of property start declining, and when the prices of that go lower than the value of the credit outstanding that the banks have created, then banks have a serious problem. And that’s the difference, that’s why you have to understand the 18-year cycle; because when you get the downturn, when the property prices start declining below the value of the bank credit outstanding, that’s when you’ve got a serious issue. And that didn’t happen in 2001–2002, and that’s the essential difference people need to understand. That’s why it seems to me in the history I’ve studied of the US, that phenomenon of real estate prices going below the value of the loans outstanding, that seems to happen every 18 to 19 years.
Dan: So this is a key question for where stocks are at right now, and I’m actually going to refer people to an article you wrote in October 2008.
Phil: Yeah, that was my lead story for the UK’s largest finance magazine, Money Week.
Dan: That’s right, Money Week Magazine, based in London, which is actually one of our affiliates.
Phil: Oh really, OK.
Dan: Yeah. They put Phil’s story on the cover, and the cover story was called ‘Property Will Fall Until at Least 2011, Then US Stocks Will Lead the Way’. So I encourage people to read it; it’s October 10th 2008.
Phil: It’s on the web, it’s easily accessible.
Dan: Yeah, and you’ll get a very good introduction of Phil’s key ideas, but really the main idea for today’s discussion is that you said back then that property prices in the US would probably bottom some time in 2010, but it might take them a couple of years to recover, and we would know when the recovery was coming by the behaviour of stocks.
Phil: The stock market, yeah. That’s a good synopsis. Actually, if you study the history of these things, you know if you look back in the past you can see clearly what happens at the real estate lows. Real estate takes a long time to turn, but at those lows…you know that you’re coming out of those lows when the stock market starts to recover. So clearly when you go back in history, 1991 and 1974 and every 18 years prior to that, as stock markets — as the real estate prices, actually they continue to go a little bit lower — the stock market starts to recover. Now, the reason that happens, as we know and I’m sure your readers are aware, the stock market is always looking six to nine months ahead.
So by the time real estate’s making its lows, the stock market is already discounting that information, because it’s public, the market knows that already, and it’s looking ahead for the next six to 12 months, to what might happen in the future. The stock market itself, over the last, say, during 2010 and 2011, the stock market started making higher highs. So that was the players in the stock market, that was their judgement that things had bottomed. Things were starting to improve. Now, the thing with that is, this is what fools absolutely everybody that hasn’t had experience in the market before…in fact it’s a concept that’s quite difficult to understand in a sense, unless you’ve been around the market for a long time…the stock market starts making higher bottoms, which we got right through 2010 and 2011, but those higher bottoms happen on actually worse economic news. And that’s what fools everybody. So unless you can learn to read a chart — and that’s where I learned from the great WD Gann — if you can get to read that chart effectively, the higher bottoms, even though they’re on worse economic news, are actually telling you that the market thinks things are improving. I’ve noticed over the years, except at the extreme highs, the stock market never gets that wrong. So once those higher bottoms were occurring it was fairly clear to me that despite the economic news getting worse, and despite in the US property news getting a little bit worse, company earnings were improving, and therefore when company earnings improve the prices of stocks simply have to go up. And that’s what’s been happening over the last couple of years. That process has happened every single time, in exactly the same way, since 1800 in the US, and that’s what I documented in the book. It’s an astounding repeat; I can’t understand why more people can’t see this.
Dan: This is, I think, what’s interesting about having Phil here right now, because the conventional view right now, and it probably would be my view, all though I wouldn’t describe that as conventional, is that the current high on the Dow is mostly assisted by liquidity from the Fed. So the stock market is not giving you an accurate forward forecast of what’s going on in the economy. But you’re actually saying really the opposite, that you’ve got to trust the market for what it’s doing, and the stock market making a new high is not the end, this isn’t the high, it’s the beginning of something even better. Is that it?
Phil: Yeah Dan, yes. What…
Dan: [To camera] This get’s crazy by the way, so hold on.
Phil: The hardest thing to do, really, is as the stock market starts making higher bottoms while the economic news is getting worse, the hardest thing to do is to buy stocks. It really is quite tough, because all your emotions are telling you things are going to get worse. So 2010–2011 the euro was going to collapse, Greece was going to default, the European Union would break apart, but when you’ve studied history — and this is the great advantage I felt I had in writing the book and studying the history — I’ve seen that before. And right through 1991–1992 I can assure you certainly in Australia, and certainly in the US, property people in the US were screaming in 1991–1992, demanding assistance from the government. You know Trump was bankrupt and he was demanding all sorts of assistance. The news got worse, but despite that the Dow went sideways at highs. I think it was around about 1600, 1700, something like that. It’s an insanely low number now.
Then it broke into all-time new highs. Now, the thing about this which is interesting from my point of view, to study, is that the Dow is now making all-time new highs at the very beginning of a real estate cycle. If we are to…it’s not assume, it’s more than assume, but let’s just use the word ‘assumption’ economists love using that word ‘assumption’ — assuming history’s to repeat, and I demonstrate in the book, I give the reasons why history must repeat, we don’t have time to go into that today, but it must repeat and it will repeat. As it continues to repeat, the Dow is making its all-time new highs very early in the real estate cycle. The real estate cycle will continue.
Now historically when the US stock market has done that, in 1993, in 1975–1976 through there again it was hitting those highs, and before that, you can take that way before that into 1953–1954, the beginning of the cycle then when the Dow went into all-time new highs, and back even in the 1920’s when the Dow went into all-time new highs at the beginning on that real estate cycle, it forecasts another huge boom to come. So if history’s to repeat, and I’ve been saying this for some years now, the stock market going to all-time new highs, we are on the verge of another huge boom, both in real estate, both in the US, both in technology, both in energy, and that being the case, it runs counter to the conventional wisdom at the moment but this is what the market is suggesting.
Having said that though, don’t go away from here…you know, the Dow is due a retracement. It doesn’t go up in a straight line. It has to go up and then it has to retrace, and so later on in the year, the next month or two, there has to be some sort of retracement. And again, when it makes that retracement it potentially could be quite a vicious retracement. It could collapse of a few hundred thousand points in a matter of weeks, which again will panic everybody and people will say, ‘Oh we’re back into other things,’ but again it probably will just make another higher low, and then we’re off and running.
Dan: Well, there’s a lot of things we could talk about, and one thing I enjoy about this conversation and the work that you’ve produced in the last couple of years, that I agree with by the way, is that cheap energy and innovations in materials technology are two really big breakthroughs that, independent of what’s going on in the financial system, are very exciting. And for investors they’re incredibly exciting. So I share your enthusiasm. But when I saw one of your recent presentations I wanted to ask you a question. Now I’m not asking as a…I guess I’m asking as a sceptic, because I’m not trying to disprove you.
Phil: Oh, it’s good to be sceptical. I encourage people to be sceptical.
Dan: Well, you made this point very well in your October 10th 2008 Money Week article. You said that the bottom in the real estate cycle in previous cycles came usually with the liquidation or the collapse of a major financial institution. And then, sort of, credit cleared and the cycle began again. Now my question is, a lot of people would say that didn’t happen in this cycle; that it was prevented from happening by central banks who expanded their balance sheet by an aggregate of 7 trillion dollars globally, so instead of getting a market clearing price in real estate that really would have put the floor under prices and then seen a recovery, you’ve got the market kind of artificially resuscitated by central bank money. Now we are seeing signs that property prices have recovered in the US, certainly in London and some other of the major markets, but is it your view that there was a bottom in real estate prices in the US in 2010?
Phil: Oh, Dan, there’s just so much I could say about that. Yes it’s right, looking at the history, when you get to the bottom of the real estate cycle, it is the bank collapses that mark that bottom, and every 18–19 or 20 years in the US there’s been these major collapses. Now, what I’ve noted over the years is every real estate low point, the numbers just seem to get bigger, and the bank collapses seem to be bigger and bigger. The numbers are now massive, that are involved in that. So yes…in a sense, every cycle happens differently. They can’t happen in exactly the same way, otherwise everybody would see it and we’d react to it before it happens, and things would change a little bit. Plus as well, they can’t always happen the same way because you’ve always got the new technology developing, and so it’s not dealt with the same way. But the underlying cause is there.
On the way down the numbers were so big this time, and the collapse happened so quickly that the banks were collapsing on the way down. Once we got to the bottom I think the collapses had already happened, and so there wasn’t a lot left to happen. That’s the first thing. So in that sense it was a little bit harder to see, but if, you know, you read the history in the book there, you pick up the history. The second thing about that really is that we do have an even larger overriding cycle. And this is what is called the commodity price cycle. In economics it’s called the Kondratiev wave. It’s a hotly debated subject in economics, again because it’s a bit cyclical based and academic economists won’t admit of these cycles. But the so-called Kondratiev wave, which is detailing the commodity price cycle, it’s suggested that the commodity price cycle is about 54–60 years in length. Again, that’s actually how I started my business back in the early 1990’s. You can trace that history back to about 1770, or thereabouts. And as Nickolai Kondratiev, that’s why the cycle’s called the Kondratiev wave, because it’s named after old Nickolai, a Russian economist, he demonstrated clearly that commodity prices bottom every 60 years, and they tend to peak every 60 years. So it’s 30 years up, 30 years down. The last peak we had was in the early 1970’s, the last bottom we had was in the 1990’s.
We are, in my view, and if you’ve studied the K wave, it seems to be reasonably clear, we’re halfway through the up move in the commodity price cycle. This means that commodity prices will tend to stay high over the lifetime of that cycle upward, which is about 25–30 years. I think we’re halfway through that. So commodity prices are going to stay high. Because commodity prices around the world will stay high, this allows — I’ve demonstrated this, again, through some of the talks I’ve done — on the upside of the wave the real estate downturns on that upside, there’s two during that up-wave of 25–30 years, the real estate downturns on that up-wave are very sharp, but short-lived, and we tend to recover very quickly. One of the reasons why we recover very quickly is because of the relentless new technology and the invention that happens on the upside of a K wave, which Nickolai clearly demonstrated. Commodity prices, should they stay high, and I think they will, that allows the economy to recover much quicker because high commodity prices are hugely profitable for major parts of the world. So any commodity producer, any countries that produce commodities, the middle east, Canada, Australia, they see a massive boom. And the thing about that is, and this is what economists will never tell you, and you’ll know you’ve understood this process when you work out why it has to happen, at the end of the day it’s land prices — at the end of the day, not over the course of a cycle — it’s the land prices that take all the gains. This is the fundamental natural law of economics that academics just will not cope with. But it’s just a fundamental economic law. The gains that happen in society over the course of a cycle, they are taken by the land price.
Phil: And so when you get these big huge booms in commodity prices, real estate recovers from a downturn really quickly. Or indeed…sorry to interrupt you’re talking.
Dan: That’s alright.
Phil: Well, places like Canada, Australia, the middle east, you get these…in the middle east you had a short, sharp move, but in Australia, Canada, places like that, real estate will never really collapse too much, because the high commodity prices keep people in work. They create huge wealth, and it’s real wealth that happens too, and it’s real jobs. And if people keep their jobs, unemployment stays very low, high job growth, people can keep paying their mortgages, so property never really collapses.
Dan: I want to get to that point, it will be our last point because we could go all day, but I want to get to it in a second. But I told you this was interesting, so let’s just summarise I think the three key points we’ve made so far, that Phil’s made. That US real estate prices bottomed around 2010, and that the new high on the Dow now, the current high on the Dow is not the end of the rally, but since it coincides with the beginning of the real estate cycle we may be headed to much higher highs on the Dow.
Phil: Not today, but over time.
Dan: Over time. The second point, which will be welcome news to Diggers and Drillers subscribers, and really to everyone in Australia, is that if the K wave is accurate, and we’re halfway through the commodity cycle, it’s not over.
Phil: It’s very bullish Dan, it’s exceedingly bullish.
Dan: Good news for the commodity bulls. But the last point’s probably the one you’re going to spend a lot of time in a couple weeks talking about in our two hour presentation, but the real subject is how does all of this relate to Australian property prices. So we’ve talked a lot about US markets, talked a lot about long-term cycles, but what you’ve done with your work is you’ve connected these cycles to what people can expect from the Aussie property market. So without giving away what you’re going to talk about in a couple weeks, can you just briefly summarise where those first two points bring us with Australian property.
Phil: Well, for people in Australia, for property investors in Australia and people in the stock market, that’s the essential question, and that’s the exact topic we’ll be covering in the talk that you’ve asked me to give, and I’m looking forward to it. Australia follows the American market, and one of the reasons I studied the American market so intensively is because I’m a UK and Australian property and stock market investor. So I spend half my time…well, I divide my time between France, the UK and Melbourne, Australia. The US cycle leads, so if you can determine what’s happening in the American market, it gives you a great clue because you’ll know the UK market’s about six to eight months behind the US, and Australia’s about a year to a year-and-a-half behind.
So what happens in the US now will be coming to Australia and Australia will follow that in the years to come. So I think it gives you a great ability to pretty much have a good idea what’s going to happen next in Australia simply by studying US real estate markets, and some of the markets over there. Of course, you know, Australia is turning to Asia now of course, so we’ve got a new thing. History never repeats exactly. It rhymes, but it never repeats exactly. We’ve got a new thing coming through with China and its development, so I’m going to talk a little bit about China and its cycle as well, because that’s also slightly different, so we have to be aware of what’s going on there. But essentially by studying those things it gives you a good idea, it gives you clues, as to what’s coming in Australia next. I think, you know, I’ve got an 11-year old son at the moment and oh gosh I’d love to be 11 again; I think the future looks just absolutely outstanding. The new technology coming through, what you can do with iPads and computers, phones and everything else, it’s just absolutely amazing. And again, at the end of the day real estate’s going to take those gains. It’s important that your readers and your viewers understand that, and that’s what I’m going to emphasise in the talk. I will also show them the property clock that I’ve developed.
Once you get to know the reasoning and the cause behind that, you really can — I know in the talks I give it’s really hard for people to believe first up, because they get so much rubbish coming out of academic economists and people like that, but when you see this clock, it’s been the same dramatic turns since 1800 in the US. You can apply it to Australia; we follow for the same reasons, the same cause. You really can break it down year by year, as the clock turns, you can really see each year roughly what you can expect.
And then after that also…you know, people come along and hear me talk, what I’ll do as an extra towards the end I’ll relate that to what Gann called his financial timetable. Which again breaks down the 18-year cycle but then he applies that to the stock market. It is astounding what Gann was able to do. I’ll show people that, and then you can get that on a year-by-year basis. You can do some astounding planning, you really can.
Now I know in the future it’s obvious you can’t know what’s going to happen exactly, so I’m not saying you can, but you can get this sort of perspective. And again with the Dow breaking into all-time new highs today, it happens at the beginning of a real estate cycle, it allows people to just make what I think are much better investment decisions.
Dan: Well, I think it’s helped a lot of people today. I told you it was controversial, but I think it was also very interesting. Phil’s got so much material to talk about that we had to pick and choose what to cover today but, as I mentioned at the beginning, one of the things that we’re going to be doing shortly with Phil is he’s going to be given a full two hours to present his case on real estate, the real estate clock, the 18-year cycle, both the Kondratiev cycle and the work of WD Gann, so we’re going to record that and make that presentation available to you when it’s done, so keep your eyes peeled for that. Phil, thanks for coming in and talking to us, I appreciate it.
Phil: My pleasure Dan, it was great.
Dan: Good luck, we’ll see you soon.
Phil: Thanks Dan.