David Lentz

Another Absurd Homebuilder Rally

"Stephen Kim sounds like a guy you should listen to if you want to lose two-thirds of your money."

ONLY two-thirds?

I think that a much better indicator of when to buy would be when the holders of hundreds of thousands (millions?) of repo'd homes that they are unable to re-sell, begin bulldozing them and writing down the losses.

Similar to the time during Nixon's Adventure with Wage and Price controls in the 1970's when I saw TV news video of farmers burning trays of baby chicks alive, as it was the cheapest way to avoid the huge losses incurred by raising them to a marketable size, where they couldn't be sold for even a fraction of what it took to raise them. I knew then that the end of wage & price controls was at hand.

When the holders of all these repo'd homes destroy them to get them off their books (selling them at auction for any price would create unrealistic expectations for home prices and further retard the housing recovery with a significant number of homes being traded at sub-market prices), then a recovery will finally be able to begin. What all the families that formerly occupied those homes will do, I can't imagine.

10 Stock Picks For a Kid Investor

I'd like to add a couple of choices, in the theme of "buy what you know" -- Nintendo (NTDOY) and GameStop (GME). Both of these would fall into the "momentum plays" bucket, but more importantly, both have solid growth, excellent future prospects, and balance sheets that are second to none. I'm making the assumption that the requester is a young man, but a young woman is also in a good position to evaluate whether these companies are "losing their mojo" or not, as time moves on. Also, I would pick and chose from the list, as 8 grand is too little to spread across all the proffered choices. Pick four to six stocks, and stick with them for a while, don't try and trade them -- just ride them upward with their profits.