Wednesday, October 22, 2008

Sam Zell Increases Stake in Gafisa (GFA) to 18.7%

I keep looking at this dirt cheap Brazilian homebuilder Gafisa (GFA) and only watch it get cheaper. Down 22% today. I suppose if you have deep pockets and don't have to answer to outside investors you can be like Sam Zell and just buy on the way down, knowing at some point people will realize Brazil is not falling off the map. But he is probably already down 25% on his latest batch of purchases - in days. For the rest of us, you can only watch in horror even if you don't own it anymore. We sold Gafisa 6 weeks ago and it's already down an additional 55%. And it had already fallen 50% from its all time high by the time we exited in early September. Yet another international company growing in 30-60% range, and selling for single PE multiple. It is now commonplace.

Amazing to watch so many stocks now move in daily increments of 15-20% as if they are all penny stocks. Buying anything and holding for more than a daytrade is an invitation to get fingers cut off... quite relentless of a beating for this stock market. These constant 4%+ moves are simply amazing. Losing 8-10% in 2 sessions on the entire index is the new normal.
  • Sam Zell's Equity International increased its stake in Gafisa SA, Brazil's second-largest real estate developer, to 18.7 percent.
  • The fund recently acquired 3.3 million American depositary receipts issued by Gafisa, equivalent to 5 percent of outstanding shares, Sao Paulo-based Gafisa said in a regulatory filing. Gafisa shares are down 49 percent so far this year

[Nov 19: Initiating a Position in Gafisa - Brazilian Homebuilder]

No position but one day will return to Gafisa

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