Bookkeeping: Adding to DR Horton (DHI)

Let me reinforce, I don't believe for one minute housing has any hopes of a real rebound until prices are materially lower [What Should Median Home Prices be Today?] which probably happens circa latter 2009 into 2010. But the stocks are good counterweights to our normal fare, and when our commodity or global stocks sell off, generally the financial, US retailers, homebuilder stocks bounce.

As I wrote last week as I lightened up [May 14: Selling some Lennar], I simply buy these when they sell off, and sell them off when Kool Aid is running in the streets - some of these names have been hammered since my sale last week. (DHI is down 22% in 6 sessions - notice a pattern in my purchases today?) So I'm going to begin rebuilding the homebuilder stakes now, with a purchase of DR Horton as it approaches March 2008 lows. I'm taking DR Horton up to a 1.7% stake with purchases here in the $12.80s (holding my nose the entire time). If we break that March low, we could be headed to the January lows near $10. So I'm not exactly loading up the boat here. If this trade works out, I'll sell this stake off around $15 sometime in the next 60 days, when CNBC tells me about the 2nd half recovery, replete with unicorns, mermaids and shamrocks. Lennar has not fallen enough for me to rebuy what I sold off.

Long DR Horton, Lennar in fund; no personal position