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To: Stoctrash who wrote (111862)	7/10/2001 1:12:07 PM
From: Dr. Jeff	Read Replies (2) \| Respond to of 436258

<<<when the econ heads into the final shit cycle, people will be more likely to fix up vs build or buy new and also will try to fix it themselves which plays rignt into HD and LOW's hands, IMO. NO? ..just wondering. >>> The Economy is in a shit cycle NOW! And any and all positives are already priced into the stocks. LOW & HD both have ludicrous valuations and have defied gravity long enough. They each have 40 to 60% downside by my estimation. BWTFDIK.

To: Stoctrash who wrote (111862)	7/10/2001 1:29:26 PM
From: yard_man	Respond to of 436258

I think what you state is the wisdom offered by analysts -- as Dr Jeff states the valuations are quite high, but regarding your point: When people buy a new house (or rather a house new to them) they often undertake the improvements then and there -- they don't wait and why should they -- credit is available? Another time when folks are prone to do improvements is right before they sell ... Hence, I think that in a downturn, there'll be a lot less fixing up done -- let's face it -- these are really discretionary expenditures ... Another point: LOW has been showing increases in sales primarily due to expansion in the number of stores. HD is near the end of their expansion and has not been able to show the same sales growth -- they've had very little as of late -- the fit is just starting to hit the shan with the consumer. I think most will be surprised at just how economically sensitive HD and LOW are -- One more thing you are probably already aware of -- these outfits don't simply serve the do-it-yourselfer remodeler types. I often see contractors get odd items here -- no, of course they won't order all their materials for a big job from these, but they will buy items they need to finish up a job here and tools ... the drop-off in this part of the biz will not be insignificant when new construction slows down. Bottom line -- I believe their revenues are very economically sensitive.