Earnings are getting a lot stronger in the home builder industry as increased traffic and closings is certainly helping financial performance. Profits are still lagging due to the lack of pricing power and lower volumes, but I certainly wouldn’t be surprised to see volume pick up quite dramatically over the next two years. The large inventory of foreclosed homes is a problem for home builders but the situation will be worked out over time. In
our estimation many of the stocks in the industry have gotten too far ahead of themselves, but over the last couple of years we have invested in some of the bonds at attractive yield to maturities.
INVESTING IN THE FINANCIAL MARKETS INVOLVES RISKS. OPTIONS ARE NOT SUITABLE FOR ALL INVESTORS.