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DR Horton Inc. Message Board

  • Alex1444 Alex1444 May 2, 2004 11:19 PM Flag

    Deback

    Hi Deback, I see you've put up a good fight against some of these pesky short sellers; good job! Realize though that they aren't here to do anything but try and shake some shares loose from nervous longs. If you've followed any of them (especially eyefo, whom I don't read anymore, but I doubt he's changed) they'll say ANYTHING to get you to sell. Doesn't matter if it's true, or even close to being true. When caught in a lie, they will even say things like "I was just trying to get a reaction" (a la "diamondsinmypocket").

    At any rate, the point is to stay focused on why you bought the stock. If it was for technical reasons (i.e. the chart was going up), then let the charts tell you when to sell. If it was for fundamental reasons, then wait for the fundamentals tell you when to sell. Or whatever it is you choose to follow.

    These short sellers are fixated on interest rates; obviously interest rates affect the share prices on a short term basis, but not long term - not to the extent that seems to be believed, anyway. Do interest rates affect earnings? Yes, but I can't forsee a scenario where a rise in interest rates would devastate DHI's earnings as the short sellers expect. Look at 1994, when interest rates rose 300 basis points within a year. Even then, DHI's EPS continued to rise, that year and after. And I doubt anyone is expecting a rise of 300 basis points. Rates rise when the economy strengthens; a strong economy means that buyers have stronger, more solid incomes with which to buy homes. A stronger economy is often coupled with movement into "hot" economic areas, and that means new homes must be built (they can't be moved from a "cold" location to a "hot" one). And rising interest rates mean that the big builders like DHI will face LESS competition from the little "mom and pop" builders who can't afford to finance construction. About the only scenario I could see where rising interest rates would be a disaster for the big homebuilders, would be if it was a "stagflation", strong inflation, weak economy. But EVEN if that happened, seems to me that DHI's land value would appreciate rapidly, while their debt could be paid off in "cheap dollars". At any rate, with a PE below 10 I see a lot of "margin for error" in my theory. Of course, the short sellers will be yammering otherwise; so be it. We'll see. I even think that it's possible that no matter what the Fed does on Tuesday, the homebuilders are unlikely to be down by the end of this week. Volatility to get there? Of course, that's likely. But after such a bad April - even with such a great EPS report that month - I doubt that May will also be a bad month for DHI. The smart short sellers will cover if DHI dips ahead of the Fed meeting, the rest will remain here with us.

    I'd also suggest that the short sellers here are "noise". Richard Bernstein wrote an excellent book called "Navigate the Noise", I often think of it when the short sellers get to loud, or even when the longs get too giddy. Anyway, May is a new month, I'm looking forward to it - the full month that is, not necessarily the first few days. Good luck, whatever way you go with DHI and your other investments.

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    • We can start out with Jobber, since he�s the one that assured everyone that interest rates don�t matter, [long or short run]!

      Oh, BTW � Has anyone noticed that we�re almost 1/3 of the way to 9 dollars from DHI�s high of 36.50. This loss only took 5 weeks. You people can continue to call me a names, I don�t care. You�re eyes are lying to you. LOL!!!!

      <grin>

    • What if we round up all the idiots on this board and rent them out for amusement? We can go public and call the co. Rent an idiot.com LOL

      By the way, if you want to see idiots check out the NFI board.

    • <<<Are there any shorts out there that disagree with the fact that hythere2004 is an idiot?>>>

      The last 5 weeks have made your predictions look awful. DHI yielded less than 1/2 the S&P 500 prior to the housing bubble, that�s where it�s headed when rates increase. This means, DHI�s stock value is presently running one heck of a surplus. It has 3 years of tremendous gains to give back.

      Longs are blinded to the extremes of the housing bubble. You people have no idea what the FOMC has done to the consumer. This excess of liquidity is about to be slowed and you�ll see a serious drop off in home volume.

      As DHI drips closer to single digits, you�ll remember these jabs you took at me. The real question is; will you be here to accept your medicine.

    • <<<Question; will you be here to face the medicine when DHI hits 9 dollars?>>>

      Are there any shorts out there that disagree with the fact that hythere2004 is an idiot?

    • Hythere,

      The Fed announcement will be at 2:15, so your statement should have said "in less than three hours."

      I'm very disappointed in you. I thought you would learn by now that DHI will never hit nine dollars. And, by the way, you will also learn that earnings really do matter and interest rates are only a short-term fear. (The market will teach you, but it will take some time.) But I'm happy that your writing has improved quite a bit.

      >If it wasn�t the threat of higher interest rates that pissed all over your home builders the last 5 (*) weeks, what was it?

      >BTW, The FED is going to release a statement in less than 2 (*)(*) hours. Maybe you should dump your home building positions.

      >Question; (*) will you be here to face the medicine when DHI hits 9 (*) dollars?

    • <<<Statements like this confirm that you ARE and idiot.>>>

      If it wasn�t the threat of higher interest rates that pissed all over your home builders the last 5 weeks, what was it?

      BTW, The FED is going to release a statement in less than 2 hours. Maybe you should dump your home building positions.

      Question; will you be here to face the medicine when DHI hits 9 dollars?

    • <<<We only care about the driving factors that determine interest rates.>>>

      Statements like this confirm that you ARE and idiot.

    • <<<That's what makes you an idiot.>>>

      Then the entire market is full of idiots, considering DHI released incredible earnings and then proceeded to get in the barber chair.

      The ONLY was these stocks can get any traction back is lower rates.

      DHI to 9 dollars!!!

    • That's what makes you an idiot.

    • <<<The answer is �because quarter after quarter for the next 3 years they are forecasting continued record earnings and there has been no relief or disappointing numbers to the contrary>>>

      Jobber,

      You�re missing the point.

      With regard to this sector, we don�t care about earnings. We don�t care about forecast. We don�t care about charts. We don�t care about technical analysis. We don�t care what the analysts say. We don�t care what the CEO says.

      We only care about the driving factors that determine interest rates.

      Why?

      Because it's the key to affordability in this sector.

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