Confession of a housing bull
Now, I've been bullish on housing for many months. I've been bullish when sales prices posted their first decline since the Great Depression. I've been bullish when the CDO market collapsed. I've been bullish when dozens of builders from the top 200 went belly up and when analysts were predicting more bancruptcies ahead. I remained bullish even when the Case-Schiller index showed an unprecedented year-on-year decline of 11%.
But everything has its limit. The housing recession goes unabated. Foreclosures are surging, and nothing can stop this process. And despite all efforts to reinflate the bubble, property values continue to fall like a rock. One part of being a good investor is the willingness to recognize past mistakes. I can no longer keep ignoring the excellent arguments presented by floridabuilder, DemonDoug, dwot, QualityPicks, TMFBent, devoish, alstry and many others. It's time to admit my losses and move on.
The market has been kind to builders lately. We've had another short covering rally that has provided us with a good exit point. Heck, even some of my Caps picks are now in the green! It's time to remember the old adage: both bulls and bears make money, but hogs get slaughtered.
I am closing all my housing picks in Caps and real life. Some of my picks might remain on my scorecard for a few more days to see if this dead cat bounce will let me lock in a good accuracy score, but strategically, I am going to exit this sector by the end of next week.
I express my gratitude to all those whose critical comments helped me get a better grasp of the real situation in the housing industry and made me realize that I was barking at the wrong tree.