Did You Sleep Through the Retail Recovery?

The COVID-19 pandemic was supposed to deliver the final deathblow to the American mall and trigger shockwaves across the commercial real estate landscape. That apparently didn’t happen.

And for a lot of investors who’ve gotten out of the habit of checking the government’s economic data, the persistence, and even vibrancy, of the retail universe is going to come as an unwelcome shock.

We weren’t short on retail or real estate when the malls were shutting down. Now that they’re open for post-pandemic business, there are plenty of fresh opportunities for nimble and alert investors to make money.

As usual, it all starts with the numbers. The Census Bureau tracks retail sales across the entire country. In August, mainline retailers booked a seasonally adjusted $482 billion in business, which is a lot of money even for the biggest economy in history.

But the real thrill is that we’re tracking 5% bigger retail sales numbers than we were at this point last year. From a top-down point of view, it’s like the pandemic never happened. The boom is back.

Of course, once you drill down into the data, not everything is beautiful. Gas stations are still struggling, because millions of people still aren’t commuting to the office every day.

Restaurant sales are down 16% from last year. Reduced seating and lingering lockdowns will do that. Otherwise, brick-and-mortar stores are doing well, category by category.

That simply wouldn’t happen if the malls had died. Main Street is as vibrant as ever. While the spring shutdowns have left a hole in the full-year sales numbers, the gap is closing fast.

Less About Amazon Than “the Amazon of Real Estate”

Admittedly, online merchants have been the biggest beneficiary here. Sales that are moving through what the government calls “non-store retail” are up a healthy $15 billion from last year.

But online sales have hit a near-term ceiling. The channel briefly accounted for 16% of all U.S. retail activity early in the summer and has now lost a little share of the national marketplace as brick-and-mortar rivals have recovered.

I’m thinking this means Amazon.com Inc. (NASDAQ:AMZN) has run out of upside for the immediate future. If a household hasn’t converted its regular shopping cart to an electronic shipment yet, the urgency has now evaporated.

And with retailers in most categories completely shaking off the pandemic pressure, their status quo business models look relatively stable. Most stores that could pay rent last year can do it now.

Those that couldn’t handle the stress have already filed for bankruptcy protection and will liquidate. More relevant chains will fill the holes. The malls will survive.

The real estate companies that own the malls will get back to work paying dividends and making shareholders happy. This is a great time to shop for real estate investment trusts (REITs) that are trading at a pandemic discount. This will enable you to lock in a significant yield (3.5% on average) in the process.

Of course, real estate is more than retail. We’re in the middle of a housing boom as well.

If you already have a house, it can be tricky to participate in what looks like a hot residential cycle ahead. Luckily, one of the most brilliant Silicon Valley investors around aims to change that.

Chamath Palihapitiya lived in Sri Lanka, but grew up in Canada as a refugee. He was the youngest executive ever at America Online and then went to Facebook early in its existence.

By age 34, he was a billionaire. And now he’s buying a company called Opendoor that facilitates the process of purchasing houses, renovating them for resale and then rolling the returns into new properties.

Opendoor is sometimes called the Amazon of real estate. We’ll just have to see. For our purposes, once you see a stock called Social Capital Hedosophia II show up on the initial public offering (IPO) calendar, that’s your signal.

Palihapitiya is using that company to buy Opendoor. Once he does, the old stock will become Opendoor and you’ll have a way to buy and sell “the Amazon of real estate.”

My IPO Edge subscribers will be the first to know. We’ve already ridden a few triple-digit-percentage rides in this wild pandemic year. I’m looking for a lot more ahead.

And in the meantime, life goes on. We’re getting through this. You can hear my latest thoughts on my “Millionaire Maker” radio show. (Click here for recorded episodes and local stations.)

CANNABIS CORNER: AURORA’S BIG MISS

If you still needed additional proof that the agricultural end of the cannabis business is in trouble, Aurora Cannabis Inc. (NYSE:ACB) revealed everything this week.

Sales of dried plant matter are booming and are up 36% over the past year as consumers across North America who have been trapped at home are looking for a way to cut the boredom. As one of the top cultivators, ACB should be making money hand over fist.

But there’s a problem. Most of those people are smoking the cheapest strains on the market. ACB’s average price per gram sold has dropped 30%, leaving the company growing more weed and making less money.

Revenue is down 27% from last year and has even weakened 5% from quarter to quarter. That simply isn’t the growth curve that investors came here to see.

ACB and its peers gambled on being able to sell higher-end products. Cost-conscious consumers opted for value instead.

And there’s simply too much low-grade weed to support prices where they are. When one buzz feels almost as good as another, every harvest makes dispensaries happy while forcing cultivators to offer discounts simply to clear the warehouse.

I’m not shocked to see the cannabis group down 12% this week. Strong names closer to the retail customer will bounce back, as will those with a real value-added processing franchise.

We’ve talked about interesting retail names here. My IPO Edge subscribers are already having fun there. There’s more ahead.

Update on Private ‘Off the Record’ Post-Election Summit

Finally, we are really excited to let you know about what is the first actual, in-person get together we’ve had since very early this year, and it is the just-confirmed, just-verified and ready to rock and roll financial event of this post-lockdown year.

Today, we are cordially inviting you to our private, in-person “off the record,” financial summit sponsored by the Investment Club of America. This confidential meeting will take place on Nov. 6-7 (right after the elections) in an undisclosed location in Las Vegas.

Why is this gathering so secretive? Because our First Amendment rights are being abridged by power-hungry politicians, and we need to maintain a low profile in an era of big government.

We live in dangerous times, in which our freedoms and wealth are threatened as never before. The November 2020 election has become the most important election of the 21st century due to the stark differences between the two parties. Trump and the Republicans are struggling to maintain power in the face of a never-ending pandemic. Their policies of tax cuts, deregulation and appointing conservative justices could be overturned soon.

As it stands today, the election betting odds still favor the Democrats. If the Biden/Harris ticket wins and the Democrats take over the House and the Senate, what will this mean for investors, entrepreneurs and the citizens of America? Will the stock market crash and gold soar?

Biden & Co. have promised massive tax increases on wealthy entrepreneurs, elimination of the long-term capital gains ‘break’ on stocks, bonds, gold, silver and real estate (with tax rates exceeding 50%).

They have also promised socialistic programs like Medicare for All, free college tuition, a New Green Deal, a wealth tax, severe limitations on free speech, a new Supreme Court, all on top of out-of-control government spending. The Great Suppression has begun!

That’s why we are holding this Post-Election Summit. It is critical to your pocketbook and your way of life.

And to help make sense of it all, we have brought together some of the world’s top experts to discuss the outcome of the November elections. What will it mean in terms of our citizens’ rights to speak out, to run our businesses, to invest, to travel, to assemble and to be left alone?

Will our freedoms and standard of living be curtailed due to new government policies? Will our wealth come under attack with new taxes, inflation and regulation? Will tech and gold continue to be the favorite stocks after the November elections?

We have brought out the best and the brightest analysts in finance, economics and politics to provide their analysis and answer your questions.

The Post-Election Global Financial Summit is an “in person,” face-to-face event – not a “virtual” conference. Due to legal restrictions, attendance at this in-person event will be limited. We urge you to register now and not be disappointed.

The price for this two-day event is $299. There are no discounts and we expect to sell out quickly. To learn more about the conference, go to https://globalfinancialsummit.com/.

After you register, you will be given the name and location of the Las Vegas hotel, and you then can reserve your room and make your travel arrangements. The hotel is only $99 per night, plus tax. There is no resort fee. Parking is free. We arranged a great deal for you!

Special Note: Please do not discuss this conference on social media. This is a private conference by special invitation only. Thank you.

Our Confirmed Speakers for This event:

Mark Skousen, veteran editor of Forecasts & Strategies and the producer of FreedomFest, will analyze the impact of the November elections on the economy, the dollar, taxes and your wealth. He will give specific recommendations — what to buy, what to sell and what to expect in the next year for stocks, bonds, the dollar, real estate and commodities.

Jo Ann Skousen, associate editor of Forecasts & Strategies and director of the Anthem Film Festival, will discuss her greatest concerns for the future — the protection of the twin pillars of freedom.

John Fund, senior editor of National Review and the nation’s foremost authority on politics and elections, will assess the good, the bad and the ugly coming out of the November elections.

Sean Flynn, economics professor at Scripps College (Clermont) and principal author of the top economics textbook in the country, will assess the “New Normal” after the elections — how to survive and prosper in an age of higher taxes, growing deficits and more regulations. As the author of “The Cure That Works,” he will update us on the future of health care and the pandemic.

Jim Woods, known as the Renaissance Man, the #1 financial blogger in the world according to Tip Ranks, and co-editor of Fast Money Alert with me, will discuss his favorite investment strategies for 2021.

Hilary Kramer, editor of the popular 2-Day Trader, a talk show host and a graduate of the MBA program at the Wharton School of the University of Pennsylvania, will discuss how the November elections will be a “GameChanger” (the title of her most popular book that was #1 on Amazon this year and was also on the Wall Street Journal bestseller list).

Bryan Perry, editor of the prestigious Cash Machine advisory service, will offer his best post-election investment choices in high-tech and high-income.

Adrian Day, founder of Adrian Day Asset Management and the world’s top authority on global investing and mining stocks, will offer specific advice on the outlook for global investing, the dollar, and commodities, with specific recommendations from blue-chip miners to penny stocks that are likely to double or triple in the coming year.

We just confirmed Barbara Kolm, vice president of the central bank of Austria, who will give us an update on Europe.
More speakers will be added soon and Roger Michalski, publisher of Eagle Financial Publications, will moderate.

Time is short, and now is the time to act if you wish to be part of this historic gathering. Attendance is strictly limited, so sign up today at https://globalfinancialsummit.com/.