Some times in order to pin point when to buy you have to throw a few dollars at a stock. Paper trade till the cows come home. It just doesn't tune the mind like real money.
There are obvious reasons for the fall of Toll Brothers. Some will preach about the time to buy is when there is blood in the street. All BS crap. The fact that people will preach htat means the blood is not thick enough. If you want to know when to buy on the market bottem, you buy when the shareholders are too embaress to talk about their holdings.
The analyst were flat out wrong when they predicted the high end home builders would go under and the low end builders would survive. As a construction professional that has been sitting on the sideling for one year - YES this is my one year anniversity I think I understood the problem a bit better than Wall Street. I chose to day trade until signs of life reappear verusu jump from sinking ship to sinking ship. The exeact opposit of what Wall Street state about which home builders would survive is what happend. Here is why...
The home builders are not contractors. Nobody at Toll Brother knows how to swing a hammer. That is not their expertise. What Toll brother's expertise is. They know how to buy land, get the zoning rights change and build houses on the property when loving enviromentalist want to look out their window at a pretty cow pasture and believe it should be against the law for the neighbor farmer to retire. Some home builders are better at helping the farmer retire than others. Those that can't buy land that the city and neighbors would gadly see developed from run down abandond homes to nice new homes. Those that know how to play ball to the extream know how to buy land next dor to a national park and build a condomium.
When people say Toll Brothers is the premium builder of luxery homes. They are saying that Toll Brother knows how to tell people to go fuck themselves. The better you are at this skill the greater your oppertunities are at building a home with a higher profit margin. When housing comes back. It will be those that best know how to play the game that come out swinging.
The baby-boom generation is in the process of starting to retire - About 70% of our nation's money. With each stage of a person life come a time to move. The chart I'm showing shows the population density of senior citizens. Clearly Americans migrate when it's time to retire. most move outside te expensive real estate belt near a city, yet remain close enough to the city to visit the grand childern. The next wave of building will start. It may not be the boom we saw in 2003 and this bom will have a destintive tone to it. Houses won't be tide to the work place commute. It will be the builder that can secure the properties near lakes, rivers, and parks that get the sale.
It may very well be to early to buy, but the time is know to put the home builders back on the radar screen.
$24.38 (04/01/08)
