Replies to post #368821 on Zeev's Turnips Patch-No Politics (ZEEV)

[gtober]

It could be. I have been waiting for an SMH $35 print and breakout for a while. But, the $BPCOMPQ has rolled over, and we may be losing the necessary jam for that. I don't know what is going to happen obviously, but this is a sorely disappointing day if one is a Bull.

[profit_guy]

zeev, CNBC has a special segment about "How To Buy The Dip" - i'm serious (and that can't be good for the mkt)

...this is after they called a "turnaround day for homebuilders"...and after they promoted 5 different $1m homes to their viewership this week...lol (kinda reminds me of the "buy your own island" commercials of 2000)

...homebuilders are done imo, those are ugly candles on BZH, etc that will not be taken out

[marketmaven]

Real estate bubble adds more suds
Reports notes similarities between housing and Internet boom days
Friday, March 11, 2005

Inman News
http://www.prudentbear.com/bearschat/bbs_read.asp?mid=258327&tid=258327&fid=1&start=1&am...

A word of caution: economic fundamentals associated with the housing bubble debate are "eerily similar" to the dot-com bubble in the late 1990s, say analysts at financial advisory giant Merrill Lynch.

In an economic commentary, "Housing Bubble Getting More Bubbly," the company compares the ratio of household equity ownership relative to GDP in the opening months of 2000 with the ratio of household real estate assets to GDP in the last few years, which now is skyrocketing toward 140 percent.

The lesson, they say, is to be wary when anything begins to approach or exceed 140 percent of GDP.

"We get nervous when we see things move parabolically north because no asset class at any time ever failed to mean-revert after such an upside move," the report notes.

Looking back to the ratio of household equity ownership and GDP just before the Internet bust, the statistics show that number falling sharply in early 2000.

There's no doubt that factors such as easier access to mortgage money, historically low interest rates, the government's push to increase home-ownership levels and the income boost in recent years have contributed to the sharp rise in the ratio of household real estate assets to GDP, the report notes.

Meanwhile, population trends, such as increasing immigration levels -- often cited as contributors to the housing surge – should also be adding to GDP. But the analysts see no reason for this to cause such a sharp rise in the real estate assets to GDP ratio.

What disturbs the analysts at Merrill Lynch is the magnitude of the shift in resource allocation towards residential real estate. They say loose financial market conditions and an increasing level of exuberance for real estate have contributed more to the housing bubble than increasing incomes.

The level of consumers who now believe housing is a good investment is at a 25-year high, according to University of Michigan consumer confidence reports. Merrill Lynch notes this "exuberance, whether 'irrational' or not."

And just because the housing bubble hasn't burst doesn't mean that it doesn't exist, the report states.

Merrill Lynch is keeping a close eye on new housing supply levels, suggesting that a backlog of unsold new homes are beginning an upward trend. According to Census Bureau statistics, the ratio of unsold supply was at 3.9 percent in October, then increased to 4.7 percent in November and reached 4.8 percent in December, a five-year high.

"It's with this inventory backdrop in mind that we were less than ecstatic to see that near-5% run-up in housing starts last month – reminds us of the 'build it and they will come' mentality in the tech space circa 1999-2000," the report concludes.

[Alexander]

I see more downside in appl, dell, IBM, ebay, goog...

So, i would not be surprised to see this consolidation end with a sell-off that brings us below 2000. Many might start to panic then....getting us ready for a powerful uptrend that might take us to 2200-2300.

Just some humble thoughts...

alexander

[MyHunch]

Sold one lot of SYNA in the AH here at 22.50. May be a bit too soon (esp.if they have some news in the offing that we do not know yet), but more than makes up for the loss on OSTK!

[bfenton]

Zeev / anyone,
What's up with DECK? ; down around 6% afterhours.
Can't find any news.
Unfortunately, I'm still holding it.

[Paul A]

Dangit Zeev.. I didnt want to push my luck on CFCI and took the .20 and now I see that no guts no glory will be the saying for me come Monday morning.. They put that sucker on the top of the IBD list : (

Im going to start paying more attention to this on Fridays.. As long as it keeps working, I think it would be wise to take 2-3 positions in some of these super growth stories trying to predict which one will be bought heavy the following day.. Apparently its not hard to figure out which ones might be included, and even ranking changes and advances up in the list afford a nice 1-2 point gap.. I see my holding GSOL was wise as that advanced to the #4 position so maybe ill get 1/3 the gain I woulda if I held cfci : )

Only work involved is looking at the current list and following the earnings reports/performance of the individual issues.. Seems theres quite a crowd that uses this canslim/ibd approach to investing.. Im not one of them but have no problem taking some free rides if offered..