Hear that ringing sound??? It’s faint, almost non-exsistant, but it’s there!!!
Watch these stocks boys and girls because in the next year WALL ST. is gonna have a BLOW OUT SALE on these home builders.
I find it very funny that the shirts on the Street argue over IF we’ll sink into recession??? :shocked
IT’S HERE, MAN…IT’S HERE!!!
And you are looking at an opportunity to make a PILE of money.
Let’s look back for a second shall we??
In my opinion Toll Brothers is going down to the single digits. MY OPINION is based on the FACT that very soon EVERYONE, let me repeat that, EVERYONE, will realize…WOW, this IS a recession.
Remember the debates we had only a year ago on this forum??
You know the ones that went…your too GLOOMY, Chicken little, the sky is falling? I miss those days… The great thing about those responces was NO ONE, me included knew for sure what would happen.
I based my opinion on previous real estates busts I had seen, and to be honest even I didn’t see this melt down becoming as bad as it WILL GET.
Now back to the dinner bell. Just as we argued over the likely hood of a bust. The shirts are now arguing over a recession. They won’t be arguing for much longer. Like housing, jobs will be the next shoe to drop. Wall St. got a little taste of that dinner today with the jobs numbers. Seems things aren’t as good as “THE EXPERTS” predicted.
As this economy fails off. NO ONE…NO ONE will want anything to do with a company that HAS anything to do with building homes.
THIS IS THE DINNER BELL BEING BEATEN WITH A TIRE IRON!!!
Hey dude! For Christmas I got $300 and its just SITTING in my closet. I was thinking about buying a Tax Lien(my dad puts his name on it cause im not legal age). But hell man, those stocks are pretty low.
Any idea on how I could get some of them, im willing to spend my $300 on some investments
My dad will put his name on anything since its my money.
Who would I contact to buy some?
Am i missing a joke or something? If so, i feel dumb.
I %100 AGREE with fdjake…He is spot on the money with this…
We have been averaging our way into certain closed end funds,reits,and homebuilders…Also a few beaten down lenders…Yields are too attractive to pass up…
Dude, come on…if there’s a joke here it’s the fact that we have to tell you how to buy a stock…
Here’s how…FOR REAL…you might have a contraption in your home that looks like a TV set. It will have a typewriter key board near it. Go to this machine and type in www.scottrade.com
The machine will awaken and will give you instructions on how to open a STOCK ACCOUNT! Send your money to these people. When they confirm it’s receipt, go back to the contraption and type in your account number. Then type in TOL or CTX or KBH and hit ENTER.
I have a feeling this is a joke... am i missing something?
Should I or should I not spend my $300 on one of these?
NO, you should NOT buy one of these stocks at their current levels. These stocks are likely to drop like a rock in the next year and that would be a much better time to buy them, when they are really down and out.
In addition, if you only have $300, I would put in into a money market account and hang onto it. The stock market is too risky to put your only $300 into.
I personally think gold is toppy here,it’s equivalent to buying oil as a trade at $100 a barrel…Will it go higher?,it may…But how much…Some say $2,000 an ounce…Me on the other hand I like to buy equities that are beat to death cyclicals…I always tell anyone I know when using my approach you must AVERAGE your way into these positions…That means buying a little today,a little more next month,and the month after etc etc…This reduces the risk tremendously and also averages the price you are in at…Homebuilders are bleeding to death right here,will they go lower?..They may,they also may go higher then lower…That’s why I average into my positions…You can never call a top or a bottom in any market,at least I can’t…What I do know is when something becomes so cheap to me then I feel it’s worth to assume some risk and buy…But then again this is what I do for a living…Real Estate is a distant third…What I can tell you from personal experience is it’s always the person buying when there is blood in the streets that is rewarded the most when things turn around…I hate to be last on board to buy,I would rather avergage in…I build positions for years not months,not weeks,not days…Did I go shopping today?, yes but not even 1/10 of my entire position…I’m willing to take more downside and I will buy another 1/10 if this market bleeds heavily again…No doubt…Spreading it out over the next 6-8 months if I have to…
Problem is when people (like me or fdjake or propertymanager) form an opinion it’s not clear what our intentions are…Mine are clear now to all…I manage risk where I work and for my personal (even more so)…I wouldn’t post these opinions on a forum where a year from now someone can look back and tell me I was wrong…I said a year ago to SHORT REITS and RE related stocks,Homebuilders…I was flamed by everyone here,called names even…Was I right,you bet I was…Will I be right again?..We will have to wait and see but I can tell you this…I hate to be wrong,especially with my money on the line…
Average in always…
Be fearful when others are greedy and greedy when others are fearful…Warren Buffet
dollar cost averaging into gold at these prices I think should still be a safe & sound investment for a new investor. One more thing (to the 16 year old with the $300 to invest) Before you open a trading account find out what a no load index fund is (expense ratio compared to a regular mutual fund). Read Suse Ormans book Young Fabulas and Broke and another goodie is Robert Kiyosaki’s books very informative, just to mention a few.
I have to disagree with jdjake with his prediction on TOL, KBH and CTX, and agree with PropertyManager that these stocks are likely to drop more in the next year. If you look at their P/E and EPS, you will see why!
Toll Brothers (TOL) P/E: 79.12, which is very high. EPS: 0.22
KB Home (KBH) P/E (ttm): N/A EPS (ttm): -2.68
Centex (CTX) P/E (ttm): N/A EPS (ttm): -6.62
If you want to buy stocks and don’t want to get burned, you have to make sure that P/E should be below 20, and EPS should be aleast above 3. For example: I have owned Boeing stocks (BA) since 1996 at $33/share. However, even with their current price at 85.82, it is still a good buy. Why? Because of its P/E 16.49, EPS 5.21 and Market Cap: 66.52 Billion. In addition, with the oil price is on the rise with record setting, Boeing’s 787 Dreamliner is going to dominate the market in the years to come… and will crush AirBus in the future…
I NEVER said buy these stocks now. The entire point of the post was to WATCH these stocks because the dinner bell is STARTING to ring.
I ALSO said I thought Toll Bros. could go as low a the single digits. Obviously, if I believe the stock can fall from it’s current level of $17/share to single digits why in god’s name would I buy it at $17.
I also said that the time to BUY them would be when the reality of the recession is seen by the masses. At that point with a diving housing market AND a recession these stocks will get KILLED.
Rookienyc has the best plan…buy your way in a little at a time. I have as much chance of predicting Toll Bros going into single digits as I do picking next weeks lottery nuimbers. BUT I DO KNOW THIS…
NDLM, if your waiting for EPS numbers to make you money in this type of investing your missing the boat. NONE of these companies have CURRENT numbers that make them worth buying. By the time they do, the ship has sailed. You have to buy this stuff when it actually makes NO SENSE. If all it took was buying stock based on PE multiples and EPS numbers NO ONE WOULD WORK.
If you read my post I STATED THAT THESE STOCKS WILL DROP INTO THE SINGLE DIGITS sometime in 2008 when the recession is no longer a point worth arguing. Sort of like now when you don’t get much arguement over the FACT the housing is in bad shape.
My EXACT words were…
“WATCH THESE STOCKS BOYS AND GIRLS BECAUSE NEXT YEAR WALL ST IS GONNA HAVE A BLOW OUT SALE ON THESE HOME BUILDERS!!!”
Don’t know how you read that as run out and buy them at these prices.
fdjake I was wondering how you decide which company in the home building sector you decide to buy? Thanks a lot. Everyone wants that huge mansion and toll brothers has great brand recognition, but how you do you decipher between PHM, CENTEX D.R. HORTON etc?
tatertot,
Very good question…I personally haven’t started to buy any homebuilders because of this reason but what I am watching is insider buying,which in some cases has begun but at a very limited amount…I have bought some closed end funds and a 2-3 REITS that have yields upwards of %11-%14 annually…My reasoning is I believe in the income will continue from the companies held in these closed end funds and REITS…Most of what I have started to average into has been hit %40-%50 some even more…Also cef’s are selling at an average of %10-%15 discount to dollar value (essentially they are even cheaper to put it simply)…When it comes to the homebuilders you have to research which ones have the best track record through recessions and real estate busts…Also the best way for the average investor to play this situation is 2 ways…1) SIT THIS OUT…STAY AWAY…DON’T INVEST…2) Buy a basket of the top 3-4,my guess that would be DR Horton (DHI), Toll Brothers (TOL), Lennar (LEN),Pulte (PHM)…Buying a little each month…And I mean a little…Any money invested in this should be considered risk capital,defined means Basically, this is capital that you can lose without having to sleep on the streets…
What bothers me most about the mentality of many here is they had no problem buying real estate while the prices were rising to unrealisitc levels,leveraging to the moon,having zero real back up funds…But when quality companies get halved or worse they refuse to invest $1…This is why I will continue to look for great deals right through this credit mess (equities,real estate that cashflows,closed end funds that have high yields,reits with high yields)…I sat out the last 5 years of this real estate boom because prices made no sense to me…Now that I see the baby being thrown out with the bath water things are starting to come into focus…It’s time like this when foundations are built,or at the very least brick by brick…
History always repeats itself and this real estate bust was in my opinion very predictable…Leverage is a very bad thing,it’s bad on wall street and it’s bad on main street…It was a bubble that needed to be popped…
