Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: shades who wrote (68203)	8/28/2005 9:29:55 AM
From: Moominoid	Read Replies (1) of 74559

The annual report from a couple of years back had a lot of mortgage activity, but nothing on the books now that I can see, so must have sold it off. The big profits in the SP500 at the moment are in finance and oil/resources. More than half the total I think. As far as I can tell WLS only makes money if house prices rise. The net margin is less than the annual rate of house price increase. Profits all get plowed back into more land and construction in progress. Probably a similar story at the other homebuilders. I'm just beginning to look at this, so maybe I am wrong. If a real estate firm buys land it's an investment and for most firms interest is an expense. But not for these firms - it all adds to "inventory".

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