Everyone is talking about the AI bubble…but I'm honestly baffled at homebuilders over the past 5 months. Past two earnings have shown declining margins (rate buybacks as opposed to price drops). QoQ cancelation rates of 20 to 50%.. Increasing inventory, and reduced future orders….YET we're sitting at nearly ATH on pretty much any ticker (DHI, LEN, KBH, TOL, you name it).
Granted I lost my ass going long on puts so I'm slightly jaded…but I still cannot see a bull case for these prices unless WS is easily tricked by their obvious and unsustainable buy down tactics, or somehow sees value in parking their money in these for 5 years down the road at which point they MAY reach peak covid purchase levels.
Feel free to explain to my denseness…
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