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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (54551)	2/23/2006 11:11:56 AM
From: UncleBigs	Read Replies (1) \| Respond to of 110194

The homebuilders trade at a 6 or 7 p/e. The market has discounted weakness. I continue to think this is a tough group to short. They have a very large capacity to repurchase shares, do accretive acquisitions, declare special dividends, etc. The extremely high short interest is not helpful to the short side. Yes, housing has slowed dramatically but the market is still fairly brisk for new homes. It wouldn't surprise me to see a multi week/month rally in the homebuilders as the Spring buying season gets underway and the shorts get nervous.