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

Investment Research Dynamics

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:

Outside 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:
HOMEBUILDER SHORT SELL REPORTS

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.