Russ, the question is not whether we are at the top. The question is what does this top look like and where do we go from here?
Is this top like K-2 with a thriller downhill, or a plateau that just stay flat as far as the eye can see?
If it is the latter, one may argue that these stocks are cheap with great margins, strong cash flow, economy of scale, land inventory. While they would not see the windfall from price appreciation, their earnings should support their current price. This scenario would provide no reward for the short seller, even though the risk may also be small.
On the other hand, if both price and unit decline from here, then it would be a double whammy and it may be ugly.
I was scratching my head yesterday, trying to figure out what the insiders were doing at Lyons. With so much holding, are they planning to take the company private or preparing for a sale to a bigger builder?
With so much cash and cheap money to borrow, these guys do have a lot more options.
What do you think?
Hey, Jay, jump in any time you like. I can see you are shorting these guys.
Ramsey |
