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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (29145)12/3/2007 6:06:47 PM
From: Jurgis Bekepuris  Read Replies (1) of 79150
 
I guess NOW is the official time to buy homebuilders. After LEN deal with Morgan Stanley, I am going to throw up my hands in the air and say: "I give up". :)

If (a big IF), homies have to take 60% haircut to avoid bankruptcies, that pretty much leaves them with negative book values anyway. None, I repeat NONE of them have a positive book with 60% impairment of assets. If to save themselves, they have to fire-sell their assets for 60% discounts, then again their future might look better Chapter 11 wise, but looks much bleaker stock appreciation wise. Why the stocks should trade at anything positive when the book value is negative AND earnings are negative?

So, may the last value investor walking out please turn off the light. Would that be me? *click* :)

Disclaimers: I still own ITB, MDC and SPF. I am not sure if buying more is advisable though. This post is deliberately provocative and overlooks a lot of mitigating circumstances. ;)
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