First and foremost I in fact have never shorted anything; the title is just to make a point. Homebuilders have had a decent run of it lately for some reason. But the fact of the matter is that new homes are more expensive, and there's a boatload of inventory to go before we get anywhere near back to normal. Forget that they are slashing prices on new homes. Consider the following:
*During the big time, approximately one in six homes sold was new construction; now it is one in twenty.
*Data in February show that the average new home ran about $220,500; the average "used" home ran approximately $165,000.
*March foreclosure filings came in at a record of approximately 367,000; looks like we have another 5.5 million or so additional foreclosures in the pipeline.
*The government's efforts, whether you agree with them or not, are not exactly rendering the results they seem to have been hoping for. Granted the situtation would most likely be ( or have been) more drastic if they didn't do anything (remember Seinfeld...Prognosis Negative...so funny), the argument can be made here that this wouldn't necessarily be a bad thing. Then at least we could have been through the worst of it and have a better idea of where things really stand. I realize that is pure speculation.
So I gleaned these stats from a recent TWSJ article and felt like putting fingers to keys. I wouldn't necessarily call myself a bear (though I have been known as a pessimist by some), but I also feel like there is a spooky sense of optimism in the markets right now. I am at best cautiously optimistic, and keeping a nice bit of cash in my portfolio while being that way.