Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: John Vosilla who wrote (51511)	4/6/2006 10:03:27 AM
From: orkrious	Read Replies (1) \| Respond to of 306849

I also looked for news and couldn't find any. Of course, that made me put out some offers. the thing was going up so fast my first offer I put out at 60.46 and I got filled at 60.75. the next offer I put out at 61 and I got filled at 61.50

To: John Vosilla who wrote (51511)	4/6/2006 10:05:43 AM
From: ChanceIs	Read Replies (1) \| Respond to of 306849

>>>What does the future hold? Your stats don't tell you that...they tell you where we've been. HB's now trade 6 times earnings...they already reflect the slowdown.<<< Hmmmm. Its curious that this poster eschews the use of statistics -rearward looking little beasties that they are, and then quotes a rearward looking statistic, the P/E, as justification for his long position. It has been repeatedly noted recently that the homebuilding cycle is cyclic, and that therefore, P/Es bottom at the top - the earnings (denominator) get huge, and therefore reduce the value of the ratio. Of course, P/Es could also have dropped because the stock price has dropped. Maybe both. Its real nonlinear. I think it also characteristic of the bubble mentality, that the "this is just a dip" thinking is evident with this poster. In some ways it could be interpreted as denial. I have done it twice - ridden huge winners down the backside. I know the lies I was telling myself. I had held so long. It couldn't be the case that my dreams were evaporating, I deserved for my big gainers to return to their heights. Just some temporary misunderstanding in the market, and the trees would continue right on growing to the sky. Historical Wisdom Learned In the Trenches: Yes, you young whippersnappers should listen to your elders. I rode a big chunk of Calpine down in the summer of 2002 - the year of the broad market bottom - it were ugly, and civilized people will not mention it in polite conversation. At any rate, Calpine (power generator) kept building new power plants all that summer and through the next year. Most analysts/journalists said there was a generation glut. At the broad market bottom in Oct '02, Calpine was trading at a P/E of 2, and at about 25% of Book Value. But the future would show that they would not be able to sell their newly constructed output. They misread the demand and also the politics of selling to the regulated utilities. They were part of the S&P 500 which has an average P/E of say 17. In June '03 they claimed they would have $1 billion FCF in '05. I bailed out in February '04. They filed BK in December '05. P/Es and Price/Book tell you something. If you borrowed to build, and can't sell, the results are quite ugly. Its the business cycle. It has never been cancelled. Are home builders extrapolating both sales volumes and prices from the last three years????? I had done a short/write on TOL a couple weeks ago (shorted the stock around $34, and sold the April $35 put to lock in about $0.60.) This morning I bought the put back for about $1 dollar less, so I am naked short the underlying, which is dropping quite nicely right now.