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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Travis_Bickle who wrote (76337)4/19/2007 8:45:26 AM
From: Think4YourselfRead Replies (1) of 306849
 
and why not rally? The stock is ONLY 16 times the incredibly overoptimistic estimates of the analysts, and probably at least 30 times a realistic estimate. So what if the historical norm is 7-8? It's a new world and home building isn't cyclical anymore so the builders deserve a higher PE. ;)

It's fun to watch the earnings steadily come down each quarter, with the analysts racing to keep up by reducing their estimates after each builder warns. It has taken a bit longer than I expected for them to fall to earth but soon we will be seeing huge impact craters as earnings before writedowns go negative.

And still they build at much faster rates than they sell. Make up the loss on each house with volume?
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