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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Proud Deplorable who wrote (26104)	12/17/2004 9:30:13 AM
From: flint	Read Replies (2) \| Respond to of 306849

The problem with your opinion is that the basis for it has been around for 3 years. In that three years home builders have managed huge gains for their investors while still keep the stock below a PE of 10.. The fact is that despitethe massive growth in earnings the PE has been under 10 because your beliefs are so mainstream that everyone has been fearful of Homebuilders to the point that a telecom with zero earnings and no hope of making money for 10 years seems like a safer bet to many people. You talk of the huge tracks of land. I've known many farmers leasing these lands to take adavtage of crop price increases. You are very right on the speculation of the land decreasing in value. Certainly the price of soy beans has not risen enough to justify farming in the urban sprawl without the homebuilders discounting the lease. And with the number of new housing units expecting to drop the land is better off sold. After selling most of the land into cash. You now have a company with large cash holdings, zero debt, and a PE of under 10. Yours and everyone else's three year old theory has created a great buying oppertunity. By buying when your theory finally pans out. You are buying when the reality of how flawed the theory is. Flawed enough for the home builders to finally jestify jacking up the dividends. Flint Homebuilder Troll