<<The housing slowdown is gaining speed each week.....Inventory is ramping with unbelievable speed...and all the while interest rates are inching higher...there are no buyers in major markets that were leading the "boom" (Florida for one)...>>
Yep, no doubt about it we have an inventory problem for a while. Buyers are definitely on the sidelines waiting to see how things shake out. Speculators are selling in droves. This should be a hit to margins for the builders near term. Will this last forever? At some point there will be a time when true demand (driven by job growth) meets true supply (ex-speculator inventory).
<<Yet you talk about the "franchise value"...that's a joke when nobody wants to buy a home.>>
Yes, Sir, nobody will ever want to buy a new home again. I guess people will either rent, or maybe even live in cardboard boxes as land is forever worthless. MDC's top 5 position in great long term markets isn't worth much either. As General Lyons if he agrees.
<<You look at the "book value" as if it were a number set in stone>>
It is nearly set in stone if it is pretty close to cash value--as a big portion of MDC's assets are being converted to cash in 12-18 months.
<<....grasp the concept here...with fixed overhead>>
Fixed for a short time period, variable in the long run (land sellers, suppliers, labor costs will adjust downward too)
<<...debt>>
MDC is pretty conservatively capitalized; small builders may be toast
<<...and a lack of sales>>
1.8 million new homes expected to be sold this year is not a "lack of sales"
<<....how can anyone extrapolate an even higher book value?>>
Gee, current book value + future profits - dividends = Higher book value
That is unless you expect losses not earnings. If so, we have a fundamental disagreement.