Severe Financing bubble and mark my words...There will be a bad end to all the excess liquidity that Mr. Greenspan has pumped into our economy..People are buying homes that they cannot afford..In the past , one could do it and get away with it because of inflation..Guess what...there is no inflation and possibly,maybe even deflation..No wage increases just decreasing wages as the competition grows for limited jobs..In the past one could count on an increase in their wages to offset debt obligations that were made in the past...Not so now...Think about it...
Re: There is NO housing bubble (TOFU)
Long-Term Sentiment: Strong Buy 04/27/02 01:21 pm
Msg: 2741 of 2782
Sorry, we are in the early stages of the biggest bull market in all history.
Posted as a reply to: Msg 2740 by lma9896
The time to bail out of home builders will come, in 10 years, after they earn respect, with a p/e =25 like any other growth industry.
I expect with 20% growth some home builders will have $100 Bil in revenue and 200 Bil market cap.
With this valuation one of them would join the Daw jones; Then and ONLY then it will be time to bail out or short!
In my humble opinion:
1. Greenspan will not raise rates May 7th.
2. Stock market will go crazy for 3 months.
3. Stock market will weaken in Aug and Sept. in anticipation of rate increase, and some crappy earnings reports for third quarter.
Will update in August as to futher rate increases, have a great weekend.
I think you could make a lot money, just sitting in a castle or on a throne somewhere, telling the world leaders what's going to happen in the coming months, especially Greenspan; he will love you for telling him ahead of time what he's going to do.
If your prediction about housing weakening toward the end of the year comes true, longs will have made fortunes having held builder stocks then, as some already have to date.