Housing stocks back on the radar screen

But you will give us the "high sign" ........ right

Goofer,

Housing stocks are getting very interesting to watch. With their earnings in the ditch, cancellations outnumbering sales, mortgage malfeasance and CEOs looting the coffers, there may still be more downside to come--thus making them very attractive to the shorts. However, with the private equity guys sniffing around, and Icahn's <rejected> bid for WCI, I think that the window of opportunity to pick up some fast money will quickly slam shut for those not already holding the goods (as PE offers will set off short covering that will drive the prices up). I think opportunities in housing stocks are on a hair-trigger and with the beautiful weather just around the corner, I wouldn't want to waste it glaring at a computer screen with my finger poised over the execute button.

<Grabbing my straw hat and heading for the beach.>

Shelly

Thank you for your comments. You were also negative in August of 2006 when I told everyone on this message board what I was doing in the stock market regarding housing stocks. You were wrong then. The stocks moved up over 30% to 40% in a very short period of time. As I stated on an earlier post on this thread....DO NOT BUY THESE STOCKS NOW !!!! There will be a great opportunity later this year to make some very serious money by being LONG. When "market factors" align themselves as they did last July/August that will be the time to act. You can review those factors by re-reading my posts on the "message of the stock market thread". History always repeats itself because human nature and behavior are very predictable. This is especially true in the arena of the stock market and in speculation in general.

But you will give us the 'high sign" .................. right

Riverotter

Of course I will give you my opinion when I think it is safe to buy a housing stock. I will be wearing my helmet though, to protect myself from the straw hat wearing non-believers !! ;-)

Goofer, I recall you posting some info on purchasing housing stocks. Will you please remind us of the particular stocks you were referring to?

Shelly

Thank you for your comments. You were also negative in August of 2006 when I told everyone on this message board what I was doing in the stock market regarding housing stocks.

Back then you first stated that you were a long term investor (2-4 years) and that you were going to build your position in the housing stocks at the stated prices with an expectation of a 50% return holding these stocks 3-4 years. (I took exception to that statement (and still do) and you never really explained your reasoning for the housing turnaround that would make that type of return a reality.)

Then you morphed from a long into a trader and grabbed your profits at 10-20% before they vaporized (which I applauded).

So now--like then--I'm still negative on going long on housing stocks... and so far no one has presented any sound arguments to make me change my mind.

SHELLY

My dear lady, I gave a full and comprehensive explanation as to why I thought housing stocks were a buy last August. I obviously was correct but I had no idea that the stocks were about to explode to the upside. The stocks moved too far and too fast to the upside, so I took my profits. I never would look a gift horse in the mouth. If the move was orderly, I would have held but it was not an orderly move. No one ever went broke taking a profit. DO YOU RESENT THE FACT THAT I MADE MONEY ??? After my call every talking head was recommending housing stocks including the " great" Jim Cramer.
You obviously did not think I was right then or now. Your prerogative. I am sorry "you took exception" to my comments I will continue to do what I do with or without your approval. I am just trying to help people on this board learn the intracacies of the stock market. You expect "them" to ring a bell at the bottom.....doesn't work that way in speculation. I have always said that speculation is an art and not a science. Let me amend one thought though. I do not now consider home builders as a long term investment. I DO CONSIDER Lowes, Home Depot, and Masco as suitable long term investments. Different businesses, different cycles and different financials. I will add to my Masco, Home Depot, and Lowes if a better opportunity presents itself.
AND ONCE MORE FOR THE RECORD, SHELLY, I AM NOT SAYING TO BUY HOUSING AND HOUSING RELATED STOCKS NOW. A BETTER OPPORTUNITY STILL AWAITS US !!!! STAY TUNED.

No one ever went broke taking a profit.

Agree, unless they rolled it over into 2 pre-construction condos in Miami.

DO YOU RESENT THE FACT THAT I MADE MONEY ???

What makes you think that? I congratulated you on your good fortune back then...to do otherwise would be petty.

After my call every talking head was recommending housing stocks including the " great" Jim Cramer.

I don't follow Jim Cramer's Cartoon Carnival.

I will continue to do what I do with or without your approval. I am just trying to help people on this board learn the intracacies of the stock market. You expect "them" to ring a bell at the bottom.....doesn't work that way in speculation. I have always said that speculation is an art and not a science.

Can one teach sucessful speculation?

Here's what I know: Successful Speculation is 99% luck and 1% dumb luck.


Oh, and for the record...I'm not a lady. ;-)

.

I could not disagree with you more about luck and dumb luck being being 100% of successful speculation. Luck plays a very important part in life, generally speaking, but its not ALL luck. Hard work, experience and knowledge plays a role also. I could add timing but that is really a function of dumb luck. My offer to you of dinner at the Watersound Beach Club still stands....especially since " you are no lady" !!!! ;-)

Goofer and Shelley,

I for one am thoroughly enjoying this debate. I just wish I understood more - alot of this goes way way over my little head!!! But maybe if I read enough on both your positions I may feel enlightened one way or the other. I think you are both smart cookies!!

Happy Easter.

CHICKPEA

Thank you very much for your kind words. Discussion and debate is a grayt learning tool.
Theere are some wonderful books on investing that are very easy to understand and easy to read. I highly recommend anything written by Terry Savage and Paul Merriman's "Live it up without outliving your money".

Oh, and for the record...I'm not a lady. ;-)

.

That's what I've been saying all along.

CHICKPEA

Thank you very much for your kind words. Discussion and debate is a grayt learning tool.
Theere are some wonderful books on investing that are very easy to understand and easy to read. I highly recommend anything written by Terry Savage and Paul Merriman's "Live it up without outliving your money".

Thanks for the suggestion - I may actually pick this up or even better suggest it as reading material for my book club because then I HAVE to read it. I have a suspicion that I am far from the only one in my group that could do with refresher course on investing. In the meantime I will keep reading you guys and learning a bit along the way!

I too am enjoying this discussion. I appreciate the posts from both of you, knowing that someone is bound to take a shot at whatever position you have.

Please continue to keep us informed, goofer.

Just to add a little, I?ve been accumulation TMA on down days-- I like the quality of the company?s mortgages and the heavy buying. Time will tell.

Just to add a little, I?ve been accumulation TMA on down days-- I like the quality of the company?s mortgages and the heavy insider buying. Time will tell.

Sorry. After two (or more) martinis ?accumulating? becomes ?accumulation?.

Goofer and Shelley,

I for one am thoroughly enjoying this debate. I just wish I understood more - alot of this goes way way over my little head!!! But maybe if I read enough on both your positions I may feel enlightened one way or the other. I think you are both smart cookies!!

Happy Easter.

Chick,

Here is a good place to start: http://www.investopedia.com/university/

Happy Easter back at ya.



Shel

.

Eww, such a gusshy happy debate you are all having here.


Who's 'stocks do I gotta run up' to get a Happy Easter gropping from everyone?

Did everyone notice that ,for the record, Shelly is not a lady?

Neither am I sweetie, but I still cross my legs when I sit down.

Time for an update. As you may know the stock market has started a long overdue correction. As I have stated before, the market always gives you a good opportunity 2 or 3 times a year to add to positions. This is the 2nd opportunity after the Feb/March sell off. This is the BEGINNING of the correction. It will probably continue for another 4-6 weeks or another 5% -6% on the downside. I would suggest making up a list of blue chip high dividend paying stocks to buy. Companies such as Bank of America, Citicorp, Coca cola, Johnson and Johnson, Proctor and Gamble, Chevron, Pepsi, Altria , Chubb Insurance, General Mills, Microsoft. Or if you are uncomfortable buying individual stoack, a good low cost S&P 500 index fund is also fine. The talking heads are saying that interest rate are going higher ( they have ticked up ) and that Bill Gross has turned bearish on the bond market ( he has been wrong for 2 years ) and that emerging markets are way ahead of themselves ( true ) and that there are too many speculative private equity deals going on ( also true ) BUT..these are the excuses for a very natural, healthy AND normal correction. The market will work higher over the long term given present economic conditions. All bets are off if there is an exogenous event like a nuclear device being set off somewhere in the world by terrorists.
As far as housing stocks, I am queasy about pulling the trigger because we may be going into another housing swoon. Having said that, I will buy a 25% position in KBH at 38 a 25% position in JOE at 40 a 25% position in Centex and a 25% position in Lennar at 40.....all my limits are below the market. The reasoning being that the recession/depression in housing has to end someday and I think it will take another 3 years of bumping along before supply /demand normalizes so I am willing to leg in very slowly. I DO like MASCO at these prices and Home Depot at 36 and Lowes at 31. I would suggest nibbling on the way down. No one rings a bell at tops or bottoms whether in stocks, commodities or real estate. But all markets always over-react whether going up or down. Take advantage of the oppurtunities that are developing in the stock market.

Time for an update. As you may know the stock market has started a long overdue correction. As I have stated before, the market always gives you a good opportunity 2 or 3 times a year to add to positions. This is the 2nd opportunity after the Feb/March sell off. This is the BEGINNING of the correction. It will probably continue for another 4-6 weeks or another 5% -6% on the downside. I would suggest making up a list of blue chip high dividend paying stocks to buy. Companies such as Bank of America, Citicorp, Coca cola, Johnson and Johnson, Proctor and Gamble, Chevron, Pepsi, Altria , Chubb Insurance, General Mills, Microsoft. Or if you are uncomfortable buying individual stoack, a good low cost S&P 500 index fund is also fine. The talking heads are saying that interest rate are going higher ( they have ticked up ) and that Bill Gross has turned bearish on the bond market ( he has been wrong for 2 years ) and that emerging markets are way ahead of themselves ( true ) and that there are too many speculative private equity deals going on ( also true ) BUT..these are the excuses for a very natural, healthy AND normal correction. The market will work higher over the long term given present economic conditions. All bets are off if there is an exogenous event like a nuclear device being set off somewhere in the world by terrorists.
As far as housing stocks, I am queasy about pulling the trigger because we may be going into another housing swoon. Having said that, I will buy a 25% position in KBH at 38 a 25% position in JOE at 40 a 25% position in Centex and a 25% position in Lennar at 40.....all my limits are below the market. The reasoning being that the recession/depression in housing has to end someday and I think it will take another 3 years of bumping along before supply /demand normalizes so I am willing to leg in very slowly. I DO like MASCO at these prices and Home Depot at 36 and Lowes at 31. I would suggest nibbling on the way down. No one rings a bell at tops or bottoms whether in stocks, commodities or real estate. But all markets always over-react whether going up or down. Take advantage of the oppurtunities that are developing in the stock market.

Home Depot is tanking and I highly advise against purchasing it. It's worth less than half what it was a year ago and continues to fall due to the housing market and general consumer dissatisfaction. I 've been hoping for a slight rebound so I can sell it as friends and family in various states are all reporting horribly on their services. Johnson & Johnson and Altria are good.

Scooterbug44

Here's your opportunity to sell Home Depot. Trading up 2 points in the after mkt. Announced a 22.5 billion dollar buyback. Are you still going to sell ?

Hi Goofer,

Lots of chatter from homebuilders...are ya ready?

.

Scooterbug44

Here's your opportunity to sell Home Depot. Trading up 2 points in the after mkt. Announced a 22.5 billion dollar buyback. Are you still going to sell ?

Yes! I'm waiting for it to hit the right number before selling so I don't lose $ on the overall transaction. HD is on my list for a variety of reasons and I've been waiting for a price increase so I can unload it. Will be interesting to see what the price is by the close of the market - I think others have been waiting to unload as well.

I am a long term casual investor and I base my decisions both on my personal experiences & the feedback of friends and family. All are reporting horrendous customer service and great dissatisfaction with Home Depot in addition to my annoyance and issues with them.

anecdotal evidence can bite you on the butt. i like to buy --------- in the winter. (shelly, please fill in the blanks ) i bought hd in july of 06 at 33.50. i am waiting for long term to kick in so i get the 15% preferential tax treatment but may sell the aug 40 calls because i don't think there is much upside in hd from here.

Hi Shelly,

Note post #20 and the parameters I set. I am still waiting for KBH CTX LEN and JOE to trade down further. Maybe I will see that flush to my limits, but in any event that is where I live and only for a 25% position. I still like MAS. Lightening struck with HD, which I was long and would have added to if it got to 36. LOWES.....I am still long and will add at 31 if it gets there.