Agree w Dudeoflife - wait til there is a BK first or the Fed cuts. Maybe this time homebuilders pulled up their stakes soon enough, but there is no reason to believe they did so... Watch the price to book for the group for it to hit .80 - you can do this easily at Yahoo industry groups.
Interesting point, butI don't think you can compare nasdaq bubble with housing and vica versa. Some markets recover quicker then others.
Please don't let me talk you out of something you really want to do but I will ask you two questions. Prior to the housing run up at what p/e did most builders normally trade at? Have the builders ever traded at the PE they were trading at during their run to the top at any time in their past? When you answer those two questions you will have your answer in my opinion. Housing is not a long term growth industry. It just happend to have a great run. Metals are not a long term growth industry. They just happened to have a nice run. Mining is not a long term growth industry. They just happened to have a nice run. Railroads are not a long term growth industry. They just happened to have a nice run.
"Some markets recover quicker then others" That's true, but are you sure housing market recovers faster than NSDQ, or another way around? How do you it won't take 10 years fro housing market to recover?
I just bought 100 shares of XHB (Homebuilder spider) and will continue buying dips ONLY. No matter if XHB starts going up or down. I will only buy dips. This is a multi year trade, so it is for a long run. I will keep posting results here. 1) 07-26-2007 Bought 100 shares @26.72 Closing price 27.01 Profit: 0.90%
average down all the way until 2009-10 if you like the index here, you will love 20- 40% discount from these levels. Safe bets provide alot of liquidity.