Acting on panic never helps investors, but it's still a good idea to play devil's advocate with investments. Consider wallboard maker USG
Here at The Motley Fool, we like to consider both the good and bad sides of an investment, so in this article, I'm highlighting three of the main bearish arguments on USG today. Be sure to read the bullish side as well, and then weigh in with your own comments below or rate USG in CAPS.
1. Slow, uncertain recovery
Despite positive signs in the housing and construction markets, USG expects 2010 to be another difficult year and sees a long way back to healthy levels of demand. Despite some signs of improvement and rosy outlooks from major customer Home Depot
2. Weak housing market
Despite an uptick in housing that has lifted sales for building materials suppliers like Louisiana-Pacific
3. Lack of earnings
With residential and nonresidential construction markets still well below historical norms, USG has been swimming in red ink on its income statement for several quarters now. With a lot of risk remaining in its markets, some CAPS members remain wary that USG and other companies tied to the construction sector can generate significant profits in the foreseeable future.