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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: James Wright who wrote (5171)	5/25/1998 4:10:00 PM
From: Cary C	Read Replies (2) \| Respond to of 29382

Jim a couple of thoughts regarding DHI and interest rates. With the CON merger included, DHI has over 1 Billion in back log of Booked orders. Short term I would be surprised if it would have an effect on their actual business. When real estate was going real strong in California (7 to 10 yrs ago), interest rates were higher than they are now. Although the initial reaction might be unfavorable, I don't believe that interest rates will hinder the housing market. It is quite possible that we might see an increase of homes sales. People fearing that rates are going to go up may want to buy now so they can have a lower interest rate. I feel the key to the housing market is the current and projected strength of the economy and unemployment. People concerned of keeping or being able to get jobs will way more heavily. I think both are very strong right now and would look for them to continue. On a concern side for me with DHI is the pace in which they are acquiring other home builders. I would like to see them slow this down a little. Management is very crucial when growing at such a rapid pace. So far management has handled it well. There were some concerns on the street when they decided to merge with CON that it would be to big of a step. I believe the majority of the street was in favor of the transaction. Cary

To: James Wright who wrote (5171)	5/25/1998 4:24:00 PM
From: LTK007	Respond to of 29382

James,on Sergio's behalf,we have factored interest rates in terms of DHI own performance of as a profit making company--and moderate raising of interest rates in that sense is not problematic.BUT,the perception of raised interest rates ,and what it will do--is a problem--as investors,in the main,are taking the approach that interest rates raised will kill these homebuilders,and the only way it appears to counter this is for them to prove otherwise. A DHI spkokesman has said they could handle a 1% increase,and a 1/4% percent would pose no real problem.But the market place is jittery,it seems to be even looking for something to cause panic--we are in an uncertain interim right now. Now its getting close to party time,as Flash and the Pan as arrived. max90