stefaith

3 Comments

    • Dangerous Optimism in Homebuilders [view article]
      MR.MARKET has been alternating between manic and depressive moods with regard to the builders. No amount of data seems to have any effect on the price. Yesterday was a manic phase. Of course there is a limit to how long the market can run on empty, but it seems that the limit is higher than I or any rational person would think.

      I am also short, and waiting for reality to bring the prices down again.       May 02 08:17 AM
    • Homebuilding Stocks Surge Despite Plunging Sales [view article]
      Yesterday's market action was so irrational, it defies belief. On the day that several builders released abysmal quarterly results, and new home sales were reported as the worst ever, the builders rallied hugely. It may well be that builders are undervalued, though I doubt it, but if indeed they are, why did they rally yesterday in the face of so much bad news?

      It is said that homo sapiens is a rational animal. After yesterday, I wonder if that hypothesis can be considered valid.       Apr 25 03:33 AM
    • What Is Correct Way to Value Homebuilders? [view article]
      To value hombuilders on the basis of 2001 profitability or 2001 returns on investment makes sense. However, most builders are much bigger now than they were in 2001 so to simply assume that eps will return to 2001 levels is naive.

      They have more capital to deploy, have larger market shares, they are not the same companies that they were in 2001       Sep 22 02:37 AM
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