The Bill & Melinda Gates Foundation on Tuesday disclosed that it has taken an interest in homebuilders, reporting new stakes in KB Home (KBH), Pulte Homes Inc. (PHM), Centex Corp. (CTX), and Lennar Corp. (LEN).
11/17/2006
Who is buying the homebuilders
Value investors are the real contrarians. They wait for markets to misprice stocks and then pounce on them. If you have been watching homebuilders, the value funds and some big institutions are slowly building positions in them. If you understand the games played by large value and growth investors, you can substantially improve your trading success.
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7 comments:
have you bought any homebuilders yet? or is this type of long term value investing not party of any buying strategy? if it were, what would you look for to get in?
HOV in long term account. CHCI I flipped for 20% in few weeks return.I have studied value investing in great detail, but currently like earnings and momentum strategies. Once I become multi millionaire I will trade value strategy.
1 DWA
2 ABXA
3 EXPD
4 cldn
5 Tho
6 ccl
Some of these are my long term value ideas which I buy for long term acounts. Some may not be ideal buys at these levels as I bought some time ago.
thanks for sharing... i am interesting in "charting" them so see if any kind of shared patterns emerge ...
The pattern is most of the value ideas I buy are either transport(road, air, sea) related or entertainment related. Both sectors have been around for donkeys year. The basic needs for both is not going to go way, unless they invent the Startrek kind of instant beaming of material to be transported or find a medicine to cure people of their need for entertainment.
Both sectors have tremendous leverage , in the sense a small increase in revenue leads to large increase in profitability. Transport is the most unsexy industry. Nothing dramatic happens. So it is not like web where something new is going to kill the industry. Bulk of the costs are fixed or sunken cost. So when they have pullback or go to 52 week low, nibbling them is good strategy.
Besides that having worked for DHL and Fedex franchise in my previous career, I understand the economics of that industry.
gotcha...
i find that personally i do well with visual information - hence my interest and predisposition with charting. that being said, when i get a set of stocks that someone likes for some relatively consistent reason, i like to investigate to see if any visual commonality emerges among them...
in that sense, if you do, how to you use charts?
How Charts can help you in the stock market by Jiller is what I like. I have nothing against chartist.
My submission is that if you use some logic first to select stocks like earnings/ momentum or value based PE envolopes kind of stuff and then use technical analysis on it, your returns are dramaticaly different.
For example if you are chartist and if you forget everything else and concentrate only on the IBD top/bottom 200 composite Stock lists which they publish on Thursday, you will get atleast 3 times the return you get by using technical analysis on random set of stocks.
All those day traders who trade dummy method would find lot of easy money if they just make an effort to understand earnings. They will be with their superior visual acumen be able to make more money and enter in anticipation. Plus will have more conviction in what they are doing. Will be able to prioritise opportunities. But many are so completely wedded to technical analysis that they are not even open to alternative possibilities.
They keep on reading more books on technical analysis and keep getting deeper in to it , while there may be a better way to make money.
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