Break Time - NVR - If your going to be a bear, try not to look like a jacka$$
October 22, 2009
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Distinctions
Baby: Dah gbodis
Teenager: Hey man.... a tree
Landscaping employee: Roble
uhhhhh... ok
American Landscaping employee: Oak Tree
Botanist: Quercus
Botanist that isn't a jacka$$: Chestnut Oak
If you do not understand this section, then you are hopeless.
How to become Rich
What cheeses me off to know end are people that can't make distinctions
Everything sucks, there are no jobs, all real estate is worthless, blah blah blah..............
You know why? Because they are masters of the obvious. Look at my distinction tree, no pun intended. The more distinctions you can make on any subject in the world the more wealth you will make within the boundaries of that subject. Who makes more money? A professional cook that is highly trained in French cuisine, with an unmatched pedigree who lives and breathes his subject matter? Or the CPA MBA who gets bored with numbers, because it is all the same day after day crunching numbers............ Who is paid more money? Who is more sought after?
It doesn't matter what your field of expertise is, except for this, the more of a subject matter expert you are the more money you make and the more you will be taken seriously. Seriously.
You become rich by understanding distinctions that other people can't see. You become rich by investing your time (your job and investments) in those areas. Life really is that easy.
"Bear I Am" - Yoda when facing superior forces in Episode 5
I am a bear. However, I understand the long term fundamentals of demographics (my life span not a fricking Koi fish)... So don't give me the "country will eventually be broke BS" line.... because I will have made my money and can move to Australia or I will be dead by the time this country is broke. I can pass legacy assets to my kids and they can figure it out what to do when I am gone.
Long term fundamentals (my investment and work years time frame) play out that US residential real estate is going to come back and if bought at distressed levels the returns will be huge.
So the point of being superior in distinctions is what? Darrrr Darrrr. Point darr darr. Hungry darrr darrr.
The point of being able to distinguish things WITHIN AN ASSET CLASS OR YOUR JOB is that when everyone else is $hitting the bed like grandpa on Ex-Lax you are diving in and making the most of the opportunities presented to you at that time period.
How many times have I said you invest when the $hit is hitting the fan, you invest into a depression, you invest in the most distressed areas, and you stay employed so that you have a continued income stream to invest? Actually I think I have only said it a couple times.
NVR - A homebuilder like no other
I am blogging today because NVR reported earnings yesterday and NVR is my poster child for why bears who can't make distinctions are costing you money, just like a bull buying into the peak because we are in a new economy.
You know how many times in the last two years I have had to listen to bears tell me that all homebuilders were going bankrupt, that I don't know what I am talking about, that I am an idiot, that I am ruining people's lives by not spreading the word that everything sucks, everything is worthless......... A zillion times...... and that is why you have to listen to my rant so you get my point and you will be better for it.
This entire implosion of our economy was caused by residential housing. It is the worst homebuilding crisis since they were burning huts during the black plague!!! oh my it is so bad, I am so scared, 110% of homeowners are under water, no one can make money selling homes...........
No................. wait................... who is that over the horizon.............. a masked man? a short masked man? a short masked man with a fur coat?
No a chimp who can make distinctions. A chimp that knows a fricking Chiquita banana WITHOUT the sticker. A chimp who called builder bankruptcies before they happened... And yes my friend....
A chimp who said hold NVR when the homebuilding market was imploding like a first date with a girl whose feet are bigger than yours!!!!!!!!!!!!!!!
The brave chimp call made on 8/31/2007
The market peaked on 10/07 yet two months prior to it peaking this brave chimp who makes distinctions, who cares about providing you real time cutting edge information about the scams... but also provides you information about the values that can be had. A brave chimp who weathered countless hours in NASAs flight program, who worked summers at the local circus, and who.... yes.... who even worked for a national homebuilder, the first chimp ever!!!!!!!!!!!!!!!!!!!!!!!
The truth when you can't handle the truth - NVR performance
Yes click on that link like you mean it, with force, with confidence, with bravado
What do you see since I made my call on this blog on 8/31/2007
The GLD gold index is up just under 60% since that time.... Gold bugs you did your homework! However, at about 23% return (yes the stock is up) from pre-market implosion is NVR.... behind NVR at about 19% is a gold miner ABX.... miners suck! and who is in last place??????? The S&P 500 SPY at about -23%....................
But how?
The doom and gloomers told me to hide in a cave and recycle my waste to make sure I got every nutritional element out of my feces before I dare touch the last can of tuna!!!!!!!!!!!!!! because the world was coming to an end.
NVR cash on 8/07 was $574 million.... two years later cash and marketable securities are now $1.37 billion.... Egads
NVR has $225 a share in cash, NVR gross margins are normalized at 19.7% which is what you have when the industry is stable. NVR has only 133 million in debt. NVR's YOY orders are up 13%, yes the business has stabilized and they have a growth plan in place today........
My friends NVR is growing
Final Chimp Dance
Distinctions. I make distinctions and I still do today. The porridge is never to hot and never to cold
If you are getting your news from permabulls or permabears you will be that much poorer for it. Remember the "oil is never going under $75 argument" that cost people on CAPS loads of money last year? Remember the more recently "the stock market is overvalued and can't go higher from 666" that cost people on CAPS loads of money? Then of course the never buy real estate or homebuilders argument even when it is selling for pennies on a dollar
You will lose your a$$ investing when you listen to people that say the same crap over and over, never admit they are wrong, and never provide you distinctions of what works and what doesn't work especially in the same asset class................ they never lend credence to the other side of the argument because they are so blind.... they never once take the time to understand distinctions and distressed levels of value. Every trade has two sides, what is the other side thinking?
I know for a fact what is about to happen because I have a rolodex. There are no accidents and there is a reason why I started blogging again.
The commercial real estate market is about to implode big time. The stock market doesn't give a $hit about unemployment. You will hear everyone talking about commercial real estate. The stock market is going to tank big time as the real Wall Street decision makers scare the living crabs out of you and talk non stop about commercial real estate.
The short siders will make money, but the reality is the people who can make distinctions will make money on the long side. Much more money. A short position has a cap to zero a long side has no cap.
There is a massive transfer of wealth that is taking place and the people obtaining the wealth know it, because they are laughing and I am talking to them. This is the goverment's plan and what my next chapter is about.
Get ready to be scared cause Halloween is going to last beyond Oct 31st, especially in San Francisco. When the perma bears tell you the obvious "oh things are bad, getting worse" remember my next Chapter of what is taking place. Once the wealth transfer happens watch the market rally as the insiders have all the money and all asset classes are on sale.
There will be many masters of the obvious stating how they called the top, but look at there posts the last year. They will take credit for the stock market turning down due to whatever they feel is the problem and say "see listen to everything I am saying". Watch the news cycle and watch for news on commercial defaults. Who knows how much the market drops or how long the process takes, just remember............. the world didn't come to an end in March and it won't in your investment time horizon
Chapter 4 coming soon