Betting against the big picture on housing

Don't miss this piece in today's Thestreet.com on housing. It basically summarises the same arguments I have made in my series of posts about housing. There is a time to be bullish and there is a time to be bearish on a sector. Passing off mindless bearishness as analysis is a recipe to disaster. As a trader you should think differently from analyst and newsletter writer. Analysts who are coveted by medias like CNBC, Reuters, Business Week, CBS,WSJ, Bloomberg are always a good bet to find contrarian ideas , because media always chooses people based on what people want to hear. They represent what millions want to hear.

Dogged Homebuilders Dig In

The bad news for home builders keeps piling up, with Friday's warning from Lennar (LEN - news - Cramer's Take) the latest in a long string of disappointments.

But since bottoming in mid-July, homebuilder stocks are up over 10% amid the torrent of bad housing news. This very well could be a sign that the sector's tide is finally turning after a sickening slide that has taken the builders' stocks down about 50% from a year ago.

Just look at how the market this week shrugged off earnings guidance cuts from KB Home (KBH - news - Cramer's Take) and Beazer (BZH - news - Cramer's Take) and Hovnanian's (HOV - news - Cramer's Take) big year-over-year earnings decline and sharp drop in new orders.

Some very smart people are eyeing the homebuilders.

With the stocks trading at depressed multiples and only slightly above book value, a lot of smart investors have already pounced, including Bill Miller at Legg Mason.

The latest rumor flying around hedge fund circles is that Ed Lampert, the wonder boy manager at ESL Investments who turned around Sears (SHLD - news - Cramer's Take), is now eyeing an entry into homebuilder stocks. Lampert, through a representative, declined to comment.

Note: You can read more about it here, here, here, here, here, here, and here.
Above all read this before you follow any analyst.

The original contrarian call on 24 th August.

The overcrowded short trade in the housing stocks

When everybody gets it, best part of the move may be over. What do you see day after day, a negative story on housing. Today all the leading newspapers have negative stories about housing on front page. Expect a magazine cover this weekend or next on housing crash.
So time to cover your housing stock short. It might be time to buy housing stocks if you are value investor. I am buying CHCI,Comstock Homebuilding Comp

Housing Stocks
AVTR,Avatar Holdings Inc
AXR,Amrep Corp
BHS,Brookfield Homes
BZH,Beazer Homes Usa
CHCI,Comstock Homebuilding Comp
CTX,Centex Corp
DHI,D.R. Horton Inc
DHOM,Dominion Homes Inc
HOV,Hovnanian Enterprises A
ITB,iShares Dow Jones US Home Construction Index Fund ETF
KBH,Kb Home
LEN,Lennar Corp Cl A
LEN.B,Lennar Corp Cl B
LR,Lafarge Sa Adr
MDC,M.D.C Holdings Inc
MG631,Residential Construction
MHO,M/i Homes Inc
MTH,Meritage Homes Corp
NVR,Nvr Inc
OHB,Orleans Homebuilders Inc
PHM,Pulte Homes Inc
RYL,Ryland Group Inc. The
SPF,Standard Pacific Corp
TARR,Tarragon Corp
TOA,Technical Olympic Usa Inc
TOL,Toll Brothers Inc
WCI,Wci Communities
WLT,Walter Industries Inc

Best site to learn to trade

If you are serious about your trading and want to build an enduring edge, the Stockbee Member site might help you.

Members tell me they have tried a lot of things before coming to my site, and it has offered them the most extensive and detailed methods to swing and position trade. Members range from very experienced traders to novices.

No advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant tweets self-promoting the site, and no tall claims. Every member comes through word-of-mouth recommendations from existing members.

As a member, you will learn the basics of swing trading, momentum investing, growth investing, and risk management. You will learn about Stockbee Momentum Burst breakouts, Stockbee Trend Intensity Breakouts, Stockbee Episodic Pivots Breakouts, Stockbee Lemonade Strategy for 401k, and many other member-shared methods.

You will learn how to set up your own scans, how to select the right kind of stocks, how to set up stops, when to enter, when to exit, how much to risk, how to track your trades, and all other details about trading.

You will learn about developing your own methods and not relying on others for trade ideas. Develop your own edge. Once you develop your own method, you will have a lifelong profitable method.

The site gives you an opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different backgrounds and experiences willing to help each other. Members have shared their methods, scans, software, backtests, and market insights.

Every day, the emphasis is on continuous learning and upgrading of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors, and new traders.

You will see that many trading bloggers have been using my market timing methods, scans, and chart templates. They have developed their own methods based on my methods.

Almost every member comes through a recommendation of some of the leading trading bloggers and trading sites. 80% or more members continue to be members for more than 3 years. Most tell me that they stay on because every day they learn so much from the members' site.

If you are looking to develop your own trading strategy, the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on the members' site. Every method, every scan, every nuance is detailed, and all possible help is offered to design your own method.

404

Recent Articles