Category Archives: Texas Pacific Land

In the period from October 3, 2018 to November 23, 2018, the price of Texas Pacific Land Trust (TPL) has declined from a recent high of $871.99 to the current level of $551.99, a decline of –36.69%.  The question on everyone’s mind is, “how low will the price go?”

Using past as precedent, we looked at the Speed Resistance Lines [SRL] as outlined by Edson Gould in the period from 2003 to 2016.  First, we remind our readers that under the extraordinary period of panic, from June 29, 2007 to March 9, 2009, TPL saw a decline of -72%.

Using the 2009 low, we see the $25.65 level as the pivot and the $230.82 level as the parabolic peak.  Those points give us the following SRLs:

• $102.59 (conservative target)
• $89.77 (mid-range target)
• $76.64 (extreme target)

The entire decline was –53.87% and saw the price of TPL achieve the conservative downside target of $102.59 and with the passage of time the price almost accomplished the $89.77 mid-range target.

Fast forward to November 23, 2018 where we see the peak of TPL at $871.99.  If we allow for only the conservative downside target to be achieved then TPL will go as low as $397.12.  However, remember back in December 9, 2010 when we said, in an article titled “Real Estate: The Verdict is In,” “…we feel that real estate has a six to nine year stretch of rising prices or ‘trading’ in a range and decreased foreclosures.”

“…we feel that real estate has a six to nine year stretch of rising prices or ‘trading’ in a range and decreased foreclosures.”

Since our prescient article in 2010, in the face of shadow inventory claims that were supposed to keep prices down, we have seen a clear rising trend in the price of real estate and a significant decrease in foreclosures.  Now, with the passage of 8 years, we believe that TPL will push the limits of downside action and achieve the extreme downside target as seen in the chart below. Continue reading →