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  • nick.mach nick.mach Mar 9, 2009 10:12 AM Flag

    OK Jay, let's cut the B.S. and drill down on the numbers

    Oh excuse me your REGALNESS.

    EBITA: based on 8B 2009 sales, 500M
    CAPX 150M ( W/C= + 180M) to get to their forecast of 300 M Free cash.

    Look, we can go over this B.S. about best guesses for housing starts stabilizing etc...

    The 600K housing starts for 2009 is an extremely conservative forecast (it's 33% lower than 2008 (at this time the lowest in history)

    Ya know what, quote me, housing starts pick up in the 2nd half of the year. The new home inventory is plummeting!

    When you throw 50B at housing, something will stick.

    And based on the past, housing has a nasty habit of ticking up during the last half of the most abysmal year in a recession!

    1975, 1982 & 1991.

    And about your price estimate using a very depressed EBITA. It's useless! Either they go bankrupt in 2009 or 2010 or try using around 1.0M housing starts in 2010, 1.3M in 2011 etc.

    Guess in the short run, you may be right on price. But to sell at these depressed levels is kind of like the inverse of buying circa Nov. 1999!

    Good Luck

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    • Nicky,

      you seem to place a lot of faith in this $50Bn injection from the government into the housing market. Why does this give you so much comfort? is it the # $50Bn that makes you feel comfortable? have you investigated where exactly this money is going and how it is going to be spent and how that is going to encourage individuals / investors to start purchasing houses again?
      Unlike you, I don't think just throwing money at a problem works (see AIG if you disagree). you need to know how it is being spent and how it will revive the housing industry. one of the main issues with housing is that prices are still too high in most places. so is the govt package going to start buying houses? I don't know the answer so please shed some light on it....

      • 1 Reply to jaytrevor1
      • Jay, I've been through it.

        I've looked at MONTHLY MORTGAGE PAYMENT to disposable income, homeownership percentages, housing during past recessions etc......

        It's not so much housing booms again, its, housing stabilizing, then rising.

        New & existing home inventories are dropping, only a short period of time before housing starts rise again.

        Value Masco, based on average future conditions, not extremely depressed housing start numbers. Unless, you feel bankruptcy in 2009? Which you haven't shown convincingly.

        50B? It will help families stay in their homes, tax credits will encourage home buying, etc...

        Good Luck

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