Why don't you ask your fellow bears about the HB charts right now? Most of the HB shorts are chart-readers, not fundamentalists. While I'm a fundamentalist, even I can see that the charts are pointing up, not down. That means the only sellers will be fundamentalists, yet the HB valuationss are still far too low, thus no sellers there. Leaving only those who don't understand fundamentals and can't read charts as sellers/shorts.
See what happened to the homebuilder stocks from mid 2000 onward. We are barely into the uptrend on most HBs, for BZH the uptrend started even later than most. BZH and the other HBs could easily rise 50-100% in price within one year, and still would be undervalued at that point - and headed still higher, can you handle that as a short?
Seems to me you are relying on anecdotal evidence in your hometown of "weak" resale home prices. But the big homebuilders don't build where the markets are weak. New homes aren't exactly comparable to existing homes. Homes can't be (easily) moved from one market to another, thus one market can sag while others boom. The homebuilders already sagged from their Spring 2002 highs, when the home prices and profits were still going up. Now - even if profits were to level off (which they aren't, see DHI's 34% profit increase just reported) the stock prices have some catching up to do.
If you are simply relying on shorty BS as "reported" in Barron's (Alan Ableson's column), you should realize that the shorts have been spewing out that same BS for 3-4 years. You seem to be confusing slowing price increases for houses, with a weakening demand for homebuilder stocks. Even if there were a "bubble" in home prices (which there hasn't been, home prices were merely "catching up" from years of dormancy in the late 80's and early 90's) there has NEVER been a bubble in homebuilder stock prices. When Nasdaq hit 5100 and had PE ratios well above 100, that was a bubble. When homebuilders have PE ratios below 10, that is NOT a bubble.
As that fool "jmny" used to say: "Watch n Learn". Watch yourself lose big $$$ shorting the homebuilders now. Learn from the experience, or be doomed to repeat it.
my comments were for equities in 1999,r.e. though has hit the same level of speculation as equities in 1999 as of now in late 2002 and early 2003.the party ended.don't leave your hat at the door.NO REFUNDS NO RETURNS.
What you seem to dismiss as in any investment,there are buyer and sellers.soon the buyers will dry up.The sellers will be rushing for the exits.There was a bubble here in the late eighties,there is one now.This one though,is accompanied by a assest bubble.don't look backwards,the stock crash of 1929 had no r.e. bubble.this time we've had a stock market crash followed by a r.e. bubble.Everyone wants to relive the growth we had in the eighties and ninties.why do you think the people in charge want a dividend cut so bad.the people in the know,know that the party is over.thier income will be derived from dividends.dow 6000 nas 600.r.e. down 40% in the bubble areas.crap,how many more companies must report restatements ect ect.is any homebuilder above that.eom
"Be careful". That's always the warning given to those on the opposite end of the trade, when one is very insecure about one's own position. You're saying it says enough about you. Next I guess you'll be saying "look out below", etc. Look pal, we've all seen the shorty 101 handbook. You didn't write it, so don't act like you did.
As to "those who shorted the HBs in 1999", you're bragging about that? You think that was wise? Sure, the shorts got a very nice short term drop if they timed it right, similar to the gift the shorts got from about May through early October, 2002. But look what happened after the 1999 drop. Was that drop "presaging" a decline in HB profits going forward, as many claimed (back then)? Not at all. The 1999 fall off was just another "chicken little" scare; fundamentally, that trading was all wrong. Even if one bought at the peak of 1999 prices, they'd have made a fantastic profit if they merely held until 2001, and even better if they'd held until spring of 2002. The shorts who shorted at the peak in 1999 would have been toast if they held on until 2001 and beyond. Look at that damn charts!
Incredible that a SHORT would bring up 1999. Guess what? The late 1999-early 2000 period has already been repeated (tradingwise) - it was repeated from Spring 2002 until roughly the end of last year. Shorting now would be like shorting at the end of 2000. See the charts, note the comparisons, see what would happen to you if you'd shorted the HBs at the end of 2000. Very similar.
It's frankly hilarious to see a short like yourself coming in here now. The smart shorts have already left. Now here's you to take some lumps. Are you even aware that CTX is going to announce blowout profits tomorrow? Did you see what DHI announced last weeek? Do you know that BZH reports on Weds? Oh well, stay short until the point of maximum pain, I love seeing new shorts get roasted on the spit. Crackle, crackle.
Already in my area on the east coast
is starting to crack big time,
( what does that mean? )
where one of the largest bubbles formed.
( bubble prices = large HB profits )
( Please remember that the builder is not
obligated to sell at "bubble prices" )
longs be careful...a few went short on the market in 1999,might have been early but as we know,those few were right and were rewarded.In my opinion,others have been early calling a top on the builders but are now entering the top of the range and are crying SHORT.myself,went short HUGE today,on the home builders and lots of techs.Already in my area on the east coast is starting to crack big time,where one of the largest bubbles formed.not long before this spreads faster than sars in china.it's anybodies guess and money.today i put mine to work short.
Looks like that Barron's column is having no lasting effect on BZH or the other HBs. Might have hit them a little in the a.m., maybe. Just as I suspected, the homebuilder shorts have "cried wolf" too many times in the past, to be taken seriously now. Ivy Zelman managed to pull down the HBs in November, but now they are higher than prior to her "call". Ivy once had a good track record, now she's highly tainted.
Raj Gupta (via Barron's) managed to pull down the HBs briefly a couple months ago, but now they are MUCH higher than before he made his call. Raj Gupta - a "never was" - is now on the ash-heap of failed guru-wannabes. David Rosenberg (Merrill Lynch, quoted in Barron's Abelson column) evidently wants to join him and Ivy there. Merrill Lynch has been bulls**t on America for a long time, to put a little twist on their famous sloagan. Alan Abelson not losing credibility since he never had any as a "guru". Abelson's thing is to be constantly bearish, but with a wry sense of humor. I read Abelson for the laughs, but ignore his "advice". Looks like the market does the same.
CTX reports tomorrow and BZH on Weds. Should be another great week for the HBs.
<<<Maybe with luck I can get out of AMR at close to $5, and put it all into the HB sector at a 5% discount to this weeks closing HB stock prices.>>>
Ultimately, AMR has been a ST disappointment. Seems like we can never reduce the bet to LT survival- every time the deal is done, it is undone. This is not the bet I originally wanted to make, however, I am loathe to sell. There is still not a lot of "fluff" built into the airlines.
The HBs are the opposite, trading on the recent past and the very NT future.
Bear-ons is always negative (exc. '74 bottom). They are certainly "fed" stories by the bears; but that is also part of journalism- to show the negative side of issues.
At this point, though, I think you hold the airlines. Odds are great that the deal gets done, one way or the other. The F/As might not even have the legal right to re-vote; the judicial system is sympathetic to the company- last judge said he wouldn't help the pilots destroy more jobs...
However, even if we win large here, the stock might still be excessively volatile. I would not be a seller. I would not be a buyer. I would be a white-knuckle, nail-biting holder.
Re: HBs: We are also coming to the unfriendly 6mo. period. Having a little cash, or some non-market-correlated stocks (AMR might be such) might be well advised. Over the next two weeks I plan on getting net short again. (Net long because my longs are going up faster than my shorts are going up).
Ok, having now read the actual Barron's article, I can definitely confirm it's the same old BS in a new bottle. Ableson does quote the person who fed him the BS: David Rosenberg of Merrill Lynch. First off, Rosenberg is an economist, not a stock analyst. Second, anything coming out of Merrill Lynch is VERY suspect, if one recalls the Henry Blodgett e-mails and the David Kamansky (CEO) non-apology to the investors, as well as the $100 million fine paid by Merrill (which frankly was far too low).
Once again, this reminds me of when Ivy Zelman (via CSFB) hit the homebuilders in early Novemember, just as they were in a nice rise pattern. Or when Raj Gupta slammed the homebuilders a couple of months ago (that time also was via Barron's), just as the homebuilder stocks were making some headway. Fact it, all the homebuilders other than BZH are well above the levels they held just before Zelman dissed them (and BZH is dead even with where it was just before she slammed it in November 2002). Fact is, all the homebuilders are substantially above were the were just before Raj Gupta slammed them in Barron's a couple months ago. And I think it's a pretty safe bet that the homebuilders will be substantially higher in 3-4 months than the closed on Thursday, even with David Rosenberg's attempt to aid his fellow short sellers (assuming he's short, which seems likely; certainly it's VERY likely that someone at Merrill Lynch is short the HBs, if not the entire firm). But if Rosenberg can temporarily bring down the prices of the HB stocks, much as Zelman and Gupta did -before of course they went MUCH HIGHER than before they made their comments, then that's great - just means even more profit for those who take advantage of the dip. But there might not be as much dip this time. The Zelman-induced dip was huge (8-10% per homebuilder over about a 2 day period), the Gupta/Barron's induced one was slight (about 1-2% the first day), and the Rosenberg/Merrill Lynch/Barron's one might be even smaller.
Would also be wise to keep in mind that the Barron's article said nothing about PE's or price/book ratios, or fundamentals of homebuilder stocks in any way. It talked about a "bubble" in housing prices, not in homebuilder stocks. It said that Rosenberg believed there was a "bubble", and Ableson said "so do we". We? Hey Ableson, you haven't been editor of Barron's for years - what's this "we" stuff? Very fishy. Must mean he and his fellow co-conspirator shorts, who try to slam the homebuilder stocks whenever they look like they may break out.
Check the patterns on the homebuilder stocks, they all look great right now - which is why we could expect this brazen manipulation attempt by the shorts, via their friends/co-conspirators in the media. Even one of the BZH short posters (I forget her screenname, she was female though which narrows it down) felt that there was a conspiracy to slam the homebuilder stocks whenever they were at a possible breakout point. Remember that?
Well if Barron's and Rosenberg actually fool the public yet again (as did Zelman/CSFB and Gupta/Barron's in the recent past) their artificial downturn may be very short. Centex reports on Tuesday, probably blowout earnings. So those who want to take advantage of the media shenanigans better act fast. Chicken Little may rule on Monday, but by the time Centex reports - the HBs will be back to reality. And then later this week BZH will report, that may add even more bullish fuel to the sector.