I see it all the time. 5 years ago when this stock was hitting all-time highs, everyone on this board had Strong Buy recs. But soon as it takes a dip, you clowns are selling.
I smell a buying opportunity. You morons just... smell.
Ancient history. Bush isn't up for re-election. And anybody who knows 20s and 30s history knows a whole raft of extremely dumb mistakes have to be laid end to end to get there, it is not something that just happens occasionally. Shorts on homebuilders right now are perfectly sensible. Shorts on America long term always lose.
<<I just intiated my short position in PHM today, but believe this will get cut in half.>>
Good call. I shorted XHB this morning at 34.70.
Technically, for PHM I'm looking at an initial target price of $15. It will almost certainly get there. But the way things are evolving, I'm beginning to wonder if it might not bottom out lower. Depends on how bad the recession gets going into next year.
Agreed, PHM will trade under it's book in the coming 6-12 months IMHO..... The true book value is under 19.....The funny thing is...The BV will drop lower as their land value depreciates from the crazy prices paid over the past 2 years.....Negative earnings are coming......
The time to cover will come when you can't find anyone screaming, "buy the builders, they are cheap." I continue to hear talking heads suggesting the builders...They simply don't get it, ot they are trying to defend their position.......
I'm a little concerned about the next 2-3 years...I think our economy is looking very shaky........The housing market artificially delivered us from the small recesion 3-4 years ago and it will deliver us back to the same door step.....Good luck....
well i hope your short doesnot mean time to go long.
but, as i see it, too many homes are for sale, my builder now has 18 specs listed -up from 10 a month ago-with a price drop of 80k (orig build your own=550, or buy his quick delivery for 469).
i figure the more bubble talk and bubble articles will only feed itself and buyers will wait.
good luck witht he short. i'm in ther with you.
Great post, in the last 2 years, 3 people I know, who never invested in the real estate market, start speculating in land and building houses, early on, it was easy money, now all of a sudden, their getting hurt, you got to hear them #$%$ very funny. The point being, once the amateurs enter the market, short it. You remember 1n 1999 when everyone was going to retire on their huge 401k gains, that was the top of that market. I just intiated my short position in PHM today, but believe this will get cut in half.
Instead of getting mad about the direction of this stock or the sector for that matter, why don't you just take a short position. I never understood people going against the grain when a sector falls. US has had one of the longest housing booms in history. You can't honestly believe it would go on forever. There really is very little question as to what the FED will do at the next meeting. Lick your wounds and move on, it's better to be wrong and loss a little capital, than to be blind and loss a lot.
Not long at the moment, got out of the last just under $38. You can go look at my rec if you like, wasn't long ago.
I like PHM long term, so I follow it. Right now the bears are making it cheaper, so I get out of their way and then say "thank you" when I can buy it again.
$30 is a reasonable absolute level but there is no short term upside right now, so it is too early. The stock will go below 30 between now and June expiration, but end just under 30 near that expiration (near meaning a point or two).
Then we probably retrace a bit. That may be weak numbers and a pause or it may be stronger numbers, or just the shorts covering. There are always retraces, and from what I see they tend to follow lines that minimize payouts from long options. So I use that as one short term indicator.
If the bears want to take it to 24, great, even better, buy more there. If they want to take it to 16, which I don't they will get, better still, buy still more.
I've seen PHM cut in half four times, and every time was a great entry point. There is an incredibly simple reason this stock has returned 18% long term, the company itself just earns that much on equity over the whole cycle. That is why it has done that without the multiple expanding.
Such businesses are very lucrative for long term holders who don't care a straw how volatile the price is. 10 years from now, buys into PHM well off its cycle peak will look fine. At 30, or at 24, or a bit at both.
It pays to watch closely enough to see times to step out, and this is currently one of them. But it also pays to be in this one for the long haul. Hence the long term sentiment, and the tactical advice.
Make all you can bringing me a bargain. Best of luck.