PulteGroup, Inc. Message Board
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Why PHM investors don't understand stocks
OK so you bought all the way down and have lost your ass, however you hope one day it will come back -even if you have to wait 3 years just so you can possibly sell at a gain and be proud of your .00002% annualized gain. It may NEVER happen.
You're buying a depreciated asset (land) with huge losses in bleak future.
Meanwhile energy prices have doubled and some of the 2nd tier but still large energy companies sell well below their asset value based on $60 oil and $6 NG. EPL, XEC and EAC have gone up but not near enough to reflect their increase in net worth.
They will continue to appreciate as long as they drill for oil and energy prices stay over $60 ( that will be forever)
Most investors - if you call them that - keep throwing good money after bad.-
and just a tip, look to the financials too, after the homebuilders I think that they have the bearish opinion ( XLF could be a good way, I have bougt some calls yesterday too)
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"Do you expect the Bush administration to raise interest rates during an election year?"
No, because they have NO CONTROL OVER INTEREST RATES. Uncle Ben and his fellow bankers at the Fed do. They will raise rates if inflation is a problem. They will lower if the economy slows - which itself is a bad sign for housing in 2008.
In either case, it's moot. A move in Fed rates doesn't automatically trigger lower mortgage rates.
End of August Freddie Mac 30 year rate was = 6.45%
9/18 Fed lowered .5% ; 9/19 Freddie Mac 30 year rate = 6.34%
10/31 Fed lowered .25% ; 11/1 Freddie Mac 30 year rate = 6.33%
Wow, .75% cut in Fed rates and only .12% drop in mortgage rates. Real direct relationship there. Want to look at the rates:
http://www.freddiemac.com/dlink/html/PMMS/display/PMMSOutputYr.jsp
You're late for that Econ 101 class. -
All I can say, is you better find yourself some nice CD's to invest in. There are no guarantees in this world, however, the housing market won't be down forever. Do you expect the Bush administration to raise interest rates during an election year? I kind of doubt that. This stock will start climbing that proverbial wall of worry way sooner than most people think. In the meantime start nibbling. If I'm wrong, you won't lose much. If I'm right, you'll make a killing. Seems like a good risk reward ratio for some mad money.
Falls -
Yep - this is the typical sentiment you get when you are near a bottom in a stock. I plan to start accumulating PHM this month after the current scare. This stock was overhyped when it was in the $30's, it'll be oversold in the $10 to $12 range.
Falls- 1 Reply to piracicaba_falls
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Man, you need to know the bottum for this stock is the big donut.
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