This is an excerpt from an article I originally published on Seeking Alpha on January 12, 2012. Click here to read the entire piece.)
I last provided a comprehensive review of the housing market on September 29, 2010 in “Still Expecting Housing to Bounce Along the Bottom Until 2013.” At the time, I reiterated the case for housing not to bottom until 2013 with the market mainly muddling along until then. I still hold that view. Accordingly, last quarter, I began transitioning from a bearish positioning to what is now a bullish one on homebuilder stocks. {snip}
In the first week of January, my brother asked me whether I knew of any good mutual funds for playing the housing market – this is the same brother who was written detailed and insightful analyses on the housing market for me. I casually mentioned homebuilders and gave him a brief case for buying some shares in KB Home (KBH), mainly because the stock remains a laggard amongst publicly traded homebuilders.in the group. {snip}
Source for charts: FreeStockCharts.com
Much to my delight, my brother returned to me later that day with a reassuring review of my madness: “I did a little research and I think your call for KBH is spot on.”
{snip}
There are other reasons to stay focused on buying the dips in homebuilder stocks…{snip}…The Federal Reserve and investors alike appear ready to turn up the heat to force a bottom in this market. {snip}
Here are some key points and statistics from the Fed’s 28-page paper that interested me:
{snip}
Whatever form a housing bottom takes, all things considered, I am guessing it will not be explosive. {snip}
Be careful out there!
This is an excerpt from an article I originally published on Seeking Alpha on January 12, 2012. Click here to read the entire piece.)
Full disclosure: long KBH