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PulteGroup, Inc. Message Board

  • Fish2026 Fish2026 Nov 7, 2007 12:57 PM Flag

    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.

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    • 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)

    • hello piracicaba_falls ,
      I am in this board just to feel the sentiment in this stock and for me is GREAT!!!!, I can feel the upsept and the rokie in the short opinions, I am near sure most of them are not shorts really but frustated longs that have seen their money go away in the down, and now at the botton they are shorting... as usual in the worst moment to do it. They do not understand the risk/reagards ratio, and that their opinions are the best indicator of a excelent low risk entry point, with a great reward potential. I was ten minutes ago reading another time the book of Larry Williams "The right stock at the right time" , and it remeber me strongly the page 23, when he goes to Merv Griffin show, and he call for a botton on that year (winter of 1982), nobody belive him, even he got two hours of phone lines for a talk show supposed to last 30 minutes:

      "the callers were upset and ungry with me for being so optimistic... they simple wanted to shout and scream, taking out their frustration on my optimism.... For a long time investors had only losses to show. This condition breeds disbelief and contempt for bull market. SUCH A CONDITION is exactly what set up the opportunity for mayor buy points"

      Do you see the paralelims what we are seeing now?. It is not easy to be a contrarian in this low risk/reward ratio , but I have a strong feeling that it will pay us, and If not then we will look for the next, it is all about risk/rewards...I have bought like you in this last times, in my case 2010 leaps calls, I have enough time with little time decay , and a potential huge profit , and if not well... my losses are limit by my risk and the price of the calls .... but my potential profits.... ;-)
      Best Regards

    • "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:

      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.


    • 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.


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