graphrix_IHB
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Ben Stein, David Lereah, Greenspan, Jim Cramer and Gary Watts excluded, who have you noticed that was awfully and terribly wrong in bottom calling? <a href="http://bigpicture.typepad.com/comments/2008/08/august-2007-ben.html">I was inspired by Barry's post about this</a>. So, like he said, this can't be a one time thing, but multiple bad calls. Cite your sources, and have some fun with this. I will start with John Buckingham of Al Frank funds. Here is his <a href="http://www.ocregister.com/ocregister/money/columns/article_1255366.php">call on homebuilder stocks</a> back on August 27th, <strong>2006</strong>.
<em>The money manager and investing newsletter editor is looking to trade homes and move up from his Laguna Niguel house. He sees sellers offering serious discounts and thinks weakness in the local housing market is a buying opportunity.
Meanwhile, at work, where he edits the Prudent Speculator and runs the Al Frank mutual funds, he's actually a huge fan of homebuilders' stocks.
Yes, that's right: Bullish on homebuilders.
You may think that Buckingham's lost his marbles. Or at least expounds financial contradictions. But it's all within his bargain-hunter mentality.
Homebuilder stocks have been hammered this year. Unfairly so, Buckingham says.
"It's kind of frustrating," he says. "I'm scratching my head."
Steep price drops ? 40 percent or more in numerous cases ? in building stocks doesn't add up in Buckingham's view of the industry's strengths: geographically diversified businesses that sell a badly needed product and are coming off some of their best years in history.
And note that Buckingham's got a keen eye for bargains.
His newsletter is ranked by one prominent tracker as the top performer over the past 25 years. And his flagship Al Frank Value Fund has beaten the S&P;500 benchmark on average by 9 full percentage points the past five years.
"It works because we've gone against the grain," he says.
AVOIDING HEADLINES
Homebuilders are rarely a Wall Street favorite.
And when investors find builders attractive, the love affairs are often brief, intense flings.
Numerous investors rushed into this niche late in the game. Then they exited en masse when there was a whiff of trouble starting late last year.
Buckingham's been into building stocks since 1998 ? and isn't budging. For example, he bought D.R. Horton when it was $3 almost a decade ago, saw it rise to just above $40 only to get sliced in half.
His newsletter currently recommends 18 different builders, as part of a broadly diversified portfolio. His funds are 9 percent invested with builders.
Buckingham thinks building stocks get whipsawed because investors still mistakenly think of the business as a bunch of corporate cowboys making wild bets on raw land.
This generation of builders matured their practices into a better-run, better-financed craft. Buckingham says the industry has the financial muscle to ride out the current choppy waters.
It's a downturn that Buckingham insists is nowhere as bad as the press clippings suggest.
"It's all about the headlines," he says of investor fears.
He's not naive. He knows sales are slowing. Prices are soft at best. And he thinks there are pockets of serious trouble across the nation, perhaps even Orange County. That will mean builder profits will fall.
But it's all a matter of perspective.
In Buckingham's eyes, Wall Street analysts and the media turned a somewhat expected cyclical downturn into a cataclysmic financial debacle.
He's not buying what he sees as the underlying thesis to ensuing calamity: "The assumption is that the average homeowner is an idiot."
Harsh price drops put building stocks back to historical norms. Buckingham scoffs at suggestions that further declines are warranted, noting both builders' financial strength plus long-run demographic support.
"It's my belief that as investors start to understand the large, well-capitalized (homebuilder) companies, they'll see they aren't going bankrupt," he says. These builders "will be making money in a cyclical downturn, and investors will reward them."</em>
Man... I bet he wishes he could take that one back. Take a look at DR Horton and Lennar since then...
http://img901.mytextgraphics.com/photolava/2008/08/18/dhi806-4bk7egul9.jpeg
http://img108.mytextgraphics.com/photolava/2008/08/18/len806-4bk7f1r5c.jpeg
You might have seen some profit from the initial pops, but from what I can tell he is a long term investor and you would have been burned. Then the guy comes on <a href="http://lansner.freedomblogging.com/2007/09/22/insider-qa-finds-a-real-estate-stock-fan/">Lansner's blog in 2007 touting the same crap</a>, but my comment gets chastised because I point out this moron was invested in IndyCrap and First (soon to be) Federal bank, and not the homebuilders he was touting. I don't need to post their stock charts because we all know how that turned out.
Then... and yes... then again this guy has the cajones to talk about <a href="http://lansner.freedomblogging.com/2007/12/15/insider-qa-talks-to-investor-buying-builder/">KB Homes and StanCrap again in December of 2007</a>.
http://img801.mytextgraphics.com/photolava/2008/08/18/kbh1207-4bk7l4ypx.jpeg
http://img701.mytextgraphics.com/photolava/2008/08/18/spf1207-4bk7lenfe.jpeg
<a href="http://lansner.freedomblogging.com/2008/02/01/standard-pacifics-stock-leaps-26/">StanCrap leaps 26%</a>...
<em>?Now, it looks like there could be a ray of light and it?s not a train coming at us,? said John Buckingham, chief investment officer at Al Frank Asset Management in Laguna Beach.</em>
Basically, if you could have held out through some initial pops the shorts would have won, especially back in December of 2006 when John "the smartest thing I have done is sell my home" Buckingham was touting builders and invested in IndyCrap and First Fed.
Here are how the funds have done since 8/27/06...
http://img802.mytextgraphics.com/photolava/2008/08/18/alfd-4bk7qnwmd.jpeg
http://img902.mytextgraphics.com/photolava/2008/08/18/alfv-fk0rwhsz.jpeg
Sometimes you make a bad call, other times you look like a complete a$$.
<em>The money manager and investing newsletter editor is looking to trade homes and move up from his Laguna Niguel house. He sees sellers offering serious discounts and thinks weakness in the local housing market is a buying opportunity.
Meanwhile, at work, where he edits the Prudent Speculator and runs the Al Frank mutual funds, he's actually a huge fan of homebuilders' stocks.
Yes, that's right: Bullish on homebuilders.
You may think that Buckingham's lost his marbles. Or at least expounds financial contradictions. But it's all within his bargain-hunter mentality.
Homebuilder stocks have been hammered this year. Unfairly so, Buckingham says.
"It's kind of frustrating," he says. "I'm scratching my head."
Steep price drops ? 40 percent or more in numerous cases ? in building stocks doesn't add up in Buckingham's view of the industry's strengths: geographically diversified businesses that sell a badly needed product and are coming off some of their best years in history.
And note that Buckingham's got a keen eye for bargains.
His newsletter is ranked by one prominent tracker as the top performer over the past 25 years. And his flagship Al Frank Value Fund has beaten the S&P;500 benchmark on average by 9 full percentage points the past five years.
"It works because we've gone against the grain," he says.
AVOIDING HEADLINES
Homebuilders are rarely a Wall Street favorite.
And when investors find builders attractive, the love affairs are often brief, intense flings.
Numerous investors rushed into this niche late in the game. Then they exited en masse when there was a whiff of trouble starting late last year.
Buckingham's been into building stocks since 1998 ? and isn't budging. For example, he bought D.R. Horton when it was $3 almost a decade ago, saw it rise to just above $40 only to get sliced in half.
His newsletter currently recommends 18 different builders, as part of a broadly diversified portfolio. His funds are 9 percent invested with builders.
Buckingham thinks building stocks get whipsawed because investors still mistakenly think of the business as a bunch of corporate cowboys making wild bets on raw land.
This generation of builders matured their practices into a better-run, better-financed craft. Buckingham says the industry has the financial muscle to ride out the current choppy waters.
It's a downturn that Buckingham insists is nowhere as bad as the press clippings suggest.
"It's all about the headlines," he says of investor fears.
He's not naive. He knows sales are slowing. Prices are soft at best. And he thinks there are pockets of serious trouble across the nation, perhaps even Orange County. That will mean builder profits will fall.
But it's all a matter of perspective.
In Buckingham's eyes, Wall Street analysts and the media turned a somewhat expected cyclical downturn into a cataclysmic financial debacle.
He's not buying what he sees as the underlying thesis to ensuing calamity: "The assumption is that the average homeowner is an idiot."
Harsh price drops put building stocks back to historical norms. Buckingham scoffs at suggestions that further declines are warranted, noting both builders' financial strength plus long-run demographic support.
"It's my belief that as investors start to understand the large, well-capitalized (homebuilder) companies, they'll see they aren't going bankrupt," he says. These builders "will be making money in a cyclical downturn, and investors will reward them."</em>
Man... I bet he wishes he could take that one back. Take a look at DR Horton and Lennar since then...
http://img901.mytextgraphics.com/photolava/2008/08/18/dhi806-4bk7egul9.jpeg
http://img108.mytextgraphics.com/photolava/2008/08/18/len806-4bk7f1r5c.jpeg
You might have seen some profit from the initial pops, but from what I can tell he is a long term investor and you would have been burned. Then the guy comes on <a href="http://lansner.freedomblogging.com/2007/09/22/insider-qa-finds-a-real-estate-stock-fan/">Lansner's blog in 2007 touting the same crap</a>, but my comment gets chastised because I point out this moron was invested in IndyCrap and First (soon to be) Federal bank, and not the homebuilders he was touting. I don't need to post their stock charts because we all know how that turned out.
Then... and yes... then again this guy has the cajones to talk about <a href="http://lansner.freedomblogging.com/2007/12/15/insider-qa-talks-to-investor-buying-builder/">KB Homes and StanCrap again in December of 2007</a>.
http://img801.mytextgraphics.com/photolava/2008/08/18/kbh1207-4bk7l4ypx.jpeg
http://img701.mytextgraphics.com/photolava/2008/08/18/spf1207-4bk7lenfe.jpeg
<a href="http://lansner.freedomblogging.com/2008/02/01/standard-pacifics-stock-leaps-26/">StanCrap leaps 26%</a>...
<em>?Now, it looks like there could be a ray of light and it?s not a train coming at us,? said John Buckingham, chief investment officer at Al Frank Asset Management in Laguna Beach.</em>
Basically, if you could have held out through some initial pops the shorts would have won, especially back in December of 2006 when John "the smartest thing I have done is sell my home" Buckingham was touting builders and invested in IndyCrap and First Fed.
Here are how the funds have done since 8/27/06...
http://img802.mytextgraphics.com/photolava/2008/08/18/alfd-4bk7qnwmd.jpeg
http://img902.mytextgraphics.com/photolava/2008/08/18/alfv-fk0rwhsz.jpeg
Sometimes you make a bad call, other times you look like a complete a$$.
