Thursday, April 21, 2005

Home Builder Stock Volatility: Mark Of A Turn

To be fair, the home builders' stocks shot up today in spite of a big jump in the 10 year bond. As Robert Prechter said, volatility is to be expected at lows and peaks and the larger the trend, the more volatile the trading. The stocks have had a long, steady run up. It's choppy now, as bulls and bears wage the psychological battle.

Sorry about the server problems today. I appreciate your patience!


At 9:36 PM, Anonymous Anonymous said...

Overall, it's been two steps down, one up for home stocks of late. They seem to have hit a definite top in the beginning of March and are now exhibiting clear downward pressure. Tol has lost almost 20% in the last 7 weeks.

At 8:20 AM, Blogger breck773 said...

What is it about these so called real estate speculators? If they were truly interested in making money on the real estate boom, all they would have to do is log on and buy shares of the national homebuilders. Many have appreciated much faster than real estate lately. This would save a lot of time, and most importantly provide liquidity to get out if things turn ugly.

Oh. Wait. You have to have money (at least half) to invest in stocks, whereas it apparently takes "no money down" to "invest" in real estate.

At 9:03 AM, Anonymous Anonymous said...

In the late 1920s, we had people speculating in stocks on 5% margin. The result of that is why we have 50% margins today.

Today we have people speculating with hundreds of thousands (or millions!) of dollars on ZERO percent margin.

I'm not sure there's a precedent for this, but maybe someone who knows more economic history can correct me.


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