DHI just tanked- what gives?

[wpclarke]

DHI just dropped through the floor.

We were up 10% now down .5%.

What gives?

[The Kid]

It's 1:28 PM EST. Turn on CNBC NOW. They are about to do a report on why home-builders are having a very bad day.

[The Kid]

Here's the skinny. Toll Brothers came out with good news, big backlog of homes, etc, yet mortagage lending is starting to sputter and lenders are basically out of peeps needing to refinance. The main things is peeps are beginning to think that rates (mortgage and otherwise) will indeed rise early to mid '04 and that will slow down pace of homebuilding. Some think that the great five year run of home-builders may be over.

Remember one thing....DHI is still a great company, and its own fundamentals did not change in the least today or yesterday.

Will rates go up? If so when? Will a small change in mortgage rates have a huge impact on DHI's bottom line? We do not know these answers. The only thing that is certain ---- is that Mr.Market, the one who enlightened many of us about this fine company, will not sell all his shares in it until it goes up 15% from where he bought it at.

[mrmarket]

None baby but the brave
No one baby but the brave

[The Kid]

Let those that are scared invest in money markets, cds or put their cash under a mattress. I am glad I bought more DHI on the dip about ten days ago.

The good thing about a Mr. Market stock is that you know it is a solid company. Thus, unless something earth-shattering happens directly to the company itself, a lot of times it can withstand a little bad news surrounding it. I look forward to selling this fine company for close to a 20 % gain in about a week or two.

[ytown12]

Might have to wait a couple... years..

I am in DHI as well Kid, but after today we might have to wait a couple years to make your 20%...

[mxa]

Da Horny Iguana

Look at how the price of Da Horny Iguana [DHI] jumps around. It may take 2 years to break above 46 or it may take 2 weeks. Who knows? Who cares? Look at those earnings and growth! Even with higher interest rates, DHI will continue to grow, just a little slower than its current spectacular pace. At a p/e under 10 and positive growth, what's not to like?

[chopper77]

If I had the stock, I sure would care.

I don't care if it's the greatest, most-undervalued company in the world, if the stock price isn't going anywhere soon I don't want it in my short-term portfolio. This site is about trades with a 4-6 week horizon, not 2 years.

[SuperVoy]

Ryland Group decline took sector with it

Ryland Group gaps down, takes group with it

Stock under pressure in early trade with market participants citing co's report of an 8.9% decline in new orders.

The news has the entire group under pressure this morning: CTX -6.30, LEN -5.87, BZH -4.70, HOV -4.40, DHI -4.10

[mxa]

If I had the stock, I sure would care.

I don't care if it's the greatest, most-undervalued company in the world, if the stock price isn't going anywhere soon I don't want it in my short-term portfolio. This site is about trades with a 4-6 week horizon, not 2 years.

A quick win is peferable, of course.

It is not possible to be exactly right on with both the valuation and timing of stocks every time. From what I can see, Ernie is right on with valuation every time and right on with timing most of the time. I've never seen anyone better. Some of his wins take more than 6 weeks, but he never had a stock go worthless on him and has not had to sell for less than a 15% gain since keeping track of this run.

As shown by The Huge One several times, patience allows a beaten down stock to turn into a nice winner. That's better than selling for a loss just for the purpose of moving on.