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EScroogeJr (< 20)

Time to buy housing stocks



June 10, 2008 – Comments (6) | RELATED TICKERS: KBH , PHM

Few people paid attention, but yesterday the ITB dropped below 16, meeting floridabuilder's condition for buying. So I jumped at the opportunity and bought some KBH and PHM. As I told you many times, my strategy was to accumulate builders gradually over the year and then keep them locked in a safe for the next 2 years, so I couldn't buy a full position yesterday, but I made my position complete by buying the last remaining shares that I wanted. On a positive note, last week's housing panic allowed to me to close almost all my covered calls at a profit, so the upside potential is now unconstrained, though I might sell some calls again when floridabuilder tells us to go short.

6 Comments – Post Your Own

#1) On June 10, 2008 at 2:06 PM, mandrake66 (48.37) wrote:

I don't know how long you will take to be right, but so long as you pick the survivors I can't see how you will go wrong.

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#2) On June 10, 2008 at 2:21 PM, EScroogeJr (< 20) wrote:

mandrake66, this is precisely how I see it. Will every single builder go bankrupt, making people born after 2008 live (illegally) in tents, cars, and sleeping bags? I don't think so. There are less drastic ways to help our friend alstry turn his Californian house ATM machine back on.

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#3) On June 10, 2008 at 2:45 PM, alstry (< 20) wrote:

Americans will always need to fly, doesn't mean every public airline won't go BK.

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#4) On June 10, 2008 at 3:25 PM, EScroogeJr (< 20) wrote:

alstry, this won't happen, the market won't be taken over by the privates. And you know what will prevent it from happening? Yourself. You have become so dependent on your ATM machine, you have no choice but to fight against any construction in your backyard. And you will succeed in that. New construction will have to take place where the corn grows, and this means no infills and no mom-and-pop operations. This means big builders. You will be demanding property value protection, and by doing this you will drive every small builder out, thus clearing the space for the big publics. Remember, big guys like TOL love regulated markets.

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#5) On June 10, 2008 at 3:57 PM, QualityPicks (26.56) wrote:

EScroogeJr, sometimes I think you are a Realtor :)

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#6) On June 11, 2008 at 12:06 AM, EScroogeJr (< 20) wrote:

On the receiving end of Realtors' business :)

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