TOL ==> The Summer Solstice Winner

[skiracer]

Difference of opinion is what makes a horse race. I just feel somewhat differently about the play. Nothing personal. I loved the CMTL play and traded it a few times for several thousand in gains. Bought it again this week and am still holding it. I just feel that the housing market is considerably overbought. As far as interest rates are concerned I only believe what actually happens when it happens and not what any of the papers forecast. Not saying that what Barron's says is right or wrong but I've learned to not rely to heavily on their prognosis or forecasts. I also feel the Fed is way out of line an out of touch with what is really going down and that they're manipulating the rates to keep the whole thing afloat and in line with what the administration wants and needs.
Dialogue, whether it be agreeable or dissenting, is the key to an open forum. Nothing I ever post here should be taken personally. I'm a capitalist before anything else except God and my family, just like I believe you are. Like I said I don't want to rain on anyone's parade or put the horns on anyone's positions with my feelings or posts. But like Soupy Sales says, " be true to your teeth and they won't be false to you." You do know that I only wish you the best of luck with the position regardless of my own positions or feelings. After all it's only money.

[mrmarket]

Skiracer,

I respect your opinion and your position. The point I'm trying to make is that if you look at TOL's business model and associated earnings, it is a monster money machine. I'm making a bet that there is no bubble. If I'm right, not only is TOL not overbought, it is a ridiculous value.

The fear of the bubble is what is keeping TOL's stock price at 100, instead of 200.

[mrmarket]

With regard to the Barrons article....I never rely on what anyone else predicts or says. The only reason I point it out is that there are several global macroeconomic reasons why interest rates are staying low for a while and these are highlighted in the article.

[New-born baby]

Ski,

WE are all big boys here (some even say they are "HUGE."). SO we can take a dissenting opinion. Now please talk about the PUTS. I want to know how you'd play the options on TOL.

[skiracer]

Buy simple puts. Either the July 105 @ $4.90 ($490 per contract) or the Sept. 100 at $6.60 ($660 per contract).
I'm not trying to bum anyone out or put the horns on anything but this is just how I feel about the issue. I think there is a correction coming in the housing sector in general and that it is going to be considerable.
If you're thinking of doing something along this line then you should do it very soon as the time element on the July puts is significant. Sept. puts have more room.

[B.J]

$$MM$$, you make many excellent points differentiating the housing bubble from any other form of investment bubble (the main one being that a house is more than just an asset, and a hell of a lot better than renting).

I'm in agreement with Ski about the creative financing options that make affordability much easier than it should be, but those problems will manifest themselves 3-5 years from now when those ARM rates/interest only expire. You'll see a jump in the foreclosure market at that point. However, I guess I'd be more worried about TOL when that happens then now.

[ninner]

i agree with mr market ...i dont feel there is a housing bubble in general...with interest rates still historically low and a shortage of land out there housing is at a premium.. Another thing to keep in mind is that TOL buys land that is another benefit of owning TOL. Adding to its liquidity the stock will be splitting at the end of July which will benefit the stock in the long run. i think the stock has along way to go before it has topped and i believe right now we are in the midst of a mild correction before it will run up right before it splits!!

[skiracer]

We'll it's all in the course of good dialogue presenting feeling an opinions from both sides. There's always two sides to every coin and story. Good luck with the position regardless of my feelings about the stock. It these posts only serve to heighten anyone's level of research and analysis then that's the most positive factor we could wish for.

[canaveraldan]

The luxury homebuilder said the split will take the form of a dividend to be distributed on July 8 to shareholders of record June 21.

How does this work? If I buy in now do I still get the 2 for 1 dividend?

[mrmarket]

The luxury homebuilder said the split will take the form of a dividend to be distributed on July 8 to shareholders of record June 21.

How does this work? If I buy in now do I still get the 2 for 1 dividend?

If you own the stock before the stock splits, you get twice as many shares as you had. It's no different than any other kind of split.