Lowe's Companies, Inc. (LOW)

Flip this house is gone, at least in the real world. I don't know if the show is still on TV or not. That show was better than any paid ad Lowes and HD could ever dream of. "Spend $30k on your kitchen remodel - after all, it's an investment. See, these people here just made $50k in 25 days remodeling a kitchen, doing some major landscaping, and replacing the flooring. You can do it too." It was more than just a show. It was a dream that people wanted to believe. Don't tell me that sh*t didn't help Lowe's sales. Lowe's will survive this mess, but they are definitely going to miss having people believe that home remodeling was going to pay for itself when the house is sold.

Besides the dream that lived in a lot of people's heads, there was some basis in reality as well. It was the "Housing ATM". If you redid your kitchen and bathrooms, your house would appraise higher. Basically, you could buy stuff at Lowe's and then borrow against it. You could even borrow more than the price of the collateral. Remember, you spend $30k to remodel the kitchen, and the house goes up $50k in value, then you can borrow $40k more. You use $30k to pay for the remodel, and you have $10k left over. You never have to pay that $10k back because of course you house will never stop going up in value. Well not until about 2007 anyway when the party suddenly ended rather abruptly. It's hangover time people.

It wasn't Lowes and HD's fault that all this happened, but they were certainly beneficiaries of it. Those days aren't coming back, so don't invest in the stock hoping they will. If you want to own stock in Lowe's, wait until people have had time to figure this out.