so when the dust settles, which subprimes and homeebuilders to pick?

Discussion in 'Stocks' started by jasonjm, Aug 15, 2007.

  1. ARMS are, for the most part, for suckers.
     
    #11     Aug 15, 2007
  2. Generally I would agree, but in 1984 I had a choice of 14.75 fixed or a 10% ARM. Needless to say, I chose the ARM and continued to refinance that ARM all the way down to under 4.5%. Worked out pretty darn well back then.
     
    #12     Aug 15, 2007
  3. MDC and NVR
     
    #13     Aug 15, 2007
  4. Sheetrock via USG. This will satisfy my housing pick.

    My sub prime pick is PRU. I think this is selling off for peripheral reasons.

    "Prices of some subprime securities rated AAA and AA are now ``disproportionate to the underlying risk and are primarily liquidity-driven,'' Prudential Vice Chairman John Strangfeld said on a conference call with analysts today. ``As a consequence, we see selective opportunities to take advantage of that.''"

    Sly devils. Not to concerned trying to pick the bottom on this one. This should be a monthly or quarterly buy for the long term.
     
    #14     Aug 15, 2007
  5. My thoughts on homebuilders are provided here:
    Is It Time To Look At HomeBuilder Stocks Again?
    Who wants to catch the falling knife?

    http://hingefire.blogspot.com/2007/07/is-it-time-to-look-at-homebuilder.html

    In terms of standard lending banks, I think that CountryWide, WaMu, and Wells Fargo are the most at risk (listed in decreasing likelihood of failure). CFC is clearly at the top of the list for including in a "death-watch pool".

    The leading headline today was:
    Countrywide Falls; Merrill Cites Bankruptcy Prospect
    http://www.bloomberg.com/apps/news?pid=20601087&sid=amJ9.NMwAykU&refer=worldwide



    - Greg
     
    #15     Aug 15, 2007
  6. Maybe it will be better to look in 3 years time.
     
    #16     Aug 16, 2007
  7. Looks like cfc is going to open around 18.00. I'm definitely going to dabble in some calls to limit the risk.
     
    #17     Aug 16, 2007
  8. The problem with Fib levels is that you need to toss them out the window when it comes to stocks like this. SO you bought CFC yest at $21..your stop at $19change gets released you get filled at the open below $18.

    Not flaming you personally, just pointing out what I've been saying for months...you gotta be CAREFUL with these mortgage stocks.

    I'm not going near them with the exception of some intraday stuff.
     
    #18     Aug 16, 2007
  9. Cutten

    Cutten

    Once the bottom is in, I'm not sure it makes sense to stockpick. Just load up every homebuilder there, then jettison the ones which rally slowly and plough the money back into the ones which are rallying hard.

    The stock specific risk is huge - better to go for a surefire 50-100% upmove in the broad sector, than try to grind out extra returns by individual stockpicking IMO.
     
    #19     Sep 12, 2007
  10. KBH at these levels (last i checked) is paying a 3% dividend fwiw. that's a decent moat, assuming their financials are such that they continue paying it
     
    #20     Sep 12, 2007