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Tom Armistead
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I am a retired accountant, having spent the early years of my career in the insurance industry and the later part in the field of accounting. My insurance experience has given me the willingness to accept investment risk if I feel the return justifies it; also, an interest in applying risk... More
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  • Selling KBH on the SEC Investigation 0 comments
    Oct 13, 2009 12:12 PM | about stocks: KBH

    KB Homes (NYSE:KBH) recently announced that the SEC is investigating their accounting.  I have been long the stock, beleiving that the company's ability to appeal to the entry level buyer and generate revenue in today's markets was reason to expect them to do well when housing would recover. 

    Commentators have questioned my position, citing KBH's trouble with Chinese drywall, bad practices in their mortgage subsidiary, and the difficulty of improving margins to where they could make a profit.

    Possibly the SEC is doing their usual thing, going after some kind of insider thing on options, while more serious offenses go unchecked and unprosecuted.  Years ago I kept the books for a sleazeball contractor, there was some stuff that didn't add up very well, or make a lot of sense, but the CPA on the case always seemed to find a way to do something with retained earnings and it would go away. 

    I really don't want to find out any more on this situation, I sold the bulk of my position yesterday in the pre-market and the remainder is scheduled to go this week. 

    Stocks: KBH
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