Rory-san,
Domo, domo. That housing bubble story is very dangerous to believe, all the more so because it no doubt is true. And rational, by every single logical method available. The danger comes in trying to call the top in the housing stocks. Pull up a chart of RYL if you want to see the rocky shoals on which a shorter's yacht could easily go aground. Just count the tops. Hoo law.
As I mentioned to the estimable John Haley on the tech story, it is these stories which can kill us because they instill belief. We need, as smart investors/traders, to relegate belief to churches and sports teams, and run our engines only on facts. The facts (charts, in my twisted world) just aren't supporting the housing bubble as a viable medium term shorting opportunity. Short term, dive in and out, yes, but not medium term or longish term yet.
Check out AMZN's chart in November/December 1999. Was it a bubble? Yes. What happened if you made an investment decision based on that (wholly rational) belief? Catastrophe.
Still waiting, the higher they go, the better the short plays,
Story-less,
Kb |
