As expected, I disagree with Anders. Comparing the housing bubble bursting to the dot-com bust is like equating a magnificent mansion with a shotgun shack. The tech debacle was based on unreasonable valuations forged from iffy metrics like eyeballs and venture-capital spending. The housing market's crumble is a tangible event. Profits have become losses. Land options are being forfeited. Book values are being marked down.
You can't spin that, and you can't right it -- at least, not for several more quarters at the earliest. Besides, if tech stocks are back in fashion, why are housing-related online companies like HouseValues
Still, I had to rub my eyes when I saw my buddy Anders lean on trailing profit margins as part of the basis of his bullish argument. For starters, let's kick Homex
The other four firms are heading the wrong way, if you like positive net margins. Two of them cited posted losses in their latest quarters. The other two didn't hold up much better, with Brookfield
Anders suggests trash-picking. Let me tell you why that's a terrible idea. You're there, happily wolfing down junk, when the garbage truck scoops you up, compacts you, and leaves you even smaller than when you started.
Speaking of junk, that's what the heavy debt of Beazer Homes
"Every crash has a bottom," argues Anders. He's right. The problem here is that the skid marks are just getting started.
