Sunday, April 06, 2008
Name That Index!
One month ago, we asked readers to “Name That Company!”
The company in question was Toll Brothers. In the course of that company's regular earnings call, management had disclosed certain interesting developments in the housing market that were as unexpected as they were dramatic.
Specifically, Bob Toll discussed the fact that home sales had picked up in certain previously-dead regions of the country, in one instance (Naples, Florida) “shockingly so.”
Wall Street’s Finest did not so much dismiss the glimmer of good news as ignore it, logically reasoning out that whatever few good data points Toll could offer were certainly overwhelmed by many more bad data points in most other regions of the country.
Nevertheless, our way of looking at the news was simply this: it was the first good news on housing in this country in quite a long time, and it came at a point in the cycle when nobody seemed to expect the housing market to ever recover, possibly not even before the sun is a cold, tiny lump of debris hurtling through space.
Given the hostile reaction subsequently posted in the comments beneath the post (sample: “Yes, That IS from TollBrothers. What a joke…”[sic]) we deemed it the first sign of life in the U.S. housing market and officially reversed our August 2005 call ('Anybody who buys a home they don’t need is a moron') while acknowledging that when a second sign might come is anybody’s guess.
Today we ask readers to “Name That Index!” Now, this particular index has not seen the light of day since last summer, and has responded not one bit to whatever desperate Fed measure came its way...until the massive Fed response to the Bear Stearns collapse March 17.
Since the close of business on that dark Monday morning, this particular index is up 31%.
As for a general hint as to the index in question, let's just say that we here at NotMakingThisUp think the second sign of life in the U.S. housing market has been spotted.
I Am Not Making This Up
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The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
Posted by Jeff Matthews at 5:26 PM