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

To: GraceZ who wrote (51549)	4/6/2006 2:41:07 PM
From: Travis_Bickle	Respond to of 306849

i agree, i have a 2008 timeframe for my positions. will probably pay off well before then but who needs the worries. if i average 20% return on them over three years i'll be happy. if one or two builders go bust it'll be a bonus.

To: GraceZ who wrote (51549)	4/6/2006 3:35:16 PM
From: ChanceIs	Read Replies (2) \| Respond to of 306849

>>>Too many short term traders in those names.<<< Interesting. If you want to compare battle scars some day, you're on. The hedge funds and convertible arbitrage specialists were shorting the living daylights out of Calpine for the three years I fought it. My sense is that they are not in there yet with the homebuilders. Question for you and the board: 1) Does anyone suspect that the hedge funds are shorting the homebuilders?? Please provide arguments/evidence. 2) Does anyone know of the HBs issuing large amounts of convertible bonds?? This is a sure sign to pile in on the dark side if true. There was a time in the death cycle of Calpine when the company did a new convert, and also issued new shares because there were not enough shares in the open market for the hedge funds to short. The shares were loaned to the investment bank which was doing the convert offering. I am quite serious. Management stated as much, "not enough shares available to short." It is a great crime against the markets that the SEC didn't step in at that point and suspend trading, and immediately jail management. Creative finance can only go so far. BTW: It took Calpine 4.5 years to die. It peaked in the summer of '01, and filed BK last December. The HBs peaked only nine months ago on average. i am not suggesting that they are going to die. Hardly. But it is very easy to imagine housing dropping for at least two years. At a worst case (for a short) it will be flat - hence no reason to get long - hence an almost risk free trade. I tend to sell some puts against my shorts for income and a hedge. If there are large shorts pushing it up and down, I am still making a little.