-- Posted Tuesday, 6 February 2007 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Tuesday, February 6, 2007
“Phenomenally accurate forecasts”
We were offering shares of D.R. Horton short yesterday when the stock turned weak, denying us the fat pitch we’d hoped would start the day. Let’s keep at it, though, since there evidently are still a few bulls around to drive the stock higher once this pullback has run its course. How do we know there are bulls, even though the housing market is looking worse than it’s looked in more than 30 years? Well, for one, there are always bound to be legions of investors who believe that it is darkest before the dawn. And for two, no less an authority than The Wall Street Journal assures us that any negatives are outweighed by positives.
Or am I misinterpreting the lead on this story, from the front page of yesterday’s edition: “Amid brightening hopes that the U.S. housing market is stabilizing, some economists are zeroing in on a piece of data that could augur badly for the consensus view: the homeowner vacancy rate.” Clearly, the Journal is trying to emphasize the good over the bad here. To wit, it is only “some” economists who feel other than hopeful, and it is but one eensy-teensy little “piece of data” that has caused them to nitpick the bullish case. Moreover, these dour nitpickers have in no way refuted the “consensus” view; rather they have merely held up to the light a “piece of data” that “could augur badly” for residential real estate.
Biggest Glut in Decades
As a wordsmith and sometimes-obfuscator of inconvenient facts myself, I can appreciate the pains to which the reporter, one Michael Corkery, has gone to please his editors, the Journal’s advertisers, and all others with a vested interest in the status quo. But make no mistake, the actual “piece of data” would appear quite sufficient to dim the “brightening hopes” of even the most stubborn bulls. For it tells us that the homeowner vacancy rate – the number of vacant homes for sale – has climbed to 2.1 million units, the highest level since the Census Bureau began tracking it four decade ago.
While we’re wiping the lipstick off this pig, let us also mention that the “brightening hopes” are in part attributable to a supposed decrease in “For Sale” signs across the U.S. Granting that this is so, we would note that if inventory has indeed shrunk measurably, it is only because sellers got tired of seeing For Sale signs on their lawns and decided to stow the signs in their garages and basements till spring. If the number of vacant homes for sale continues to grow between now and then – and unless mortgage rates come down by a full percentage point, they probably will – home sellers and realtors are headed into a perfect storm.
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Seminars in Atlanta, Boca
I’ve received numerous requests to offer Hidden Pivot seminars in Atlanta, Georgia, and Boca Raton, Florida. I will do so if there is sufficient demand, so please let me know if you would be seriously interested in attending in either place. The two-day class would probably be held sometime in the spring of 2007. Contact me via e-mail, including your contact information and choice of locales. The cost would be $1,500 USD.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Tuesday, 6 February 2007 | Digg This Article | Source: GoldSeek.com
