Econ Nazi To Homebuilders: “No Soup For You” – Lumber Is Limit-Down

Buyer of my homebuilder research:   I’ve never gotten a bigger return for the value. Paid $25 pay for the report,  invested $4k in KBH Jan 15’16 $15 put since August [2014] and closed today [mid-Jan 2015] for $3.2k profit.

The price of lumber is the “tell-tale” of the tape.  It sold down hard early in the year and got a manipulated dead-cat bounce along with oil.  It’s limit-down today and headed back to multi-year lows:


Homebuilder sentiment peaked in mid-2005, just in time for Dow Jones Home Construction Index to plunge from 1,039 to 140 over the next 3 years – click to enlarge:

UntitledOutside of AMZN and private Silicon venture plays – which can’t be shorted – the homebuilder sector is THE best sector of the market to make a lot of money shorting. My reports will help you understand why:

This sector has more debt and more overvalued inventory than it did at the peak of the market in 2005/2006.  The p/e ratios are several multiples higher.  The last of the public has gorged on easy credit and “easy flips.”  This will be worse than the bear that started in 2005/2006 – the second leg down in bear markets always is…

Once I get my reports updated, I will be raising the price.

3 thoughts on “Econ Nazi To Homebuilders: “No Soup For You” – Lumber Is Limit-Down

  1. Dave, you’ll be happy to know that you have the ultimate contrary indicator working for you here. I watched CNBC for the first time in months to luxuriate in the schadenfreude as the cheerleaders had to eat some heapin’ helpin’s of crow.

    On Jim Cramer’s show he was desperately flailing around for something positive to say. The one stock I remember him pimping was . . . Toll Brothers!

  2. I know theres’ this meme in the media at the moment in regards to China blaming etf’s short sellers’ etc, but is it possible that the politburo is deliberately scratching their stock market putting upward pressure on the US dollar? They are holding 3 trillion of them. Also same flip side with US markets .gov knows what they are up to? These markets wont’ fall unless tptb want them to. There is some sinister subtext in all this. I haven’t worked it out but something is not quite as it seems. Just my opinion but maybe this could get out of hand real fast.

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