Every single one of you housing haters have been wrong in 2012. All day, every day, you talk shit about home values, as if they’re supposed to decline 20% year over year. Lo and behold, all housing related stocks have exploded to the upside. I’ve made money on the turn, several times, in a number of housing stocks. But the fun has only just begun–providing this trend continues.
Here are some hard facts, published this morning:
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, jumped 16.6 percent in the week ended Sept 28.
The index of refinancing applications surged 19.6 percent, hitting the highest level since April 2009.
Here are some other facts, with regards to year to date performance of a “housing resurgence” watchlist that I created a year ago.
Although these stocks are way up and multiples are stretched, they are likely to trade much higher. Picture housing as a giant boat. It’s not easy to turn around, but when it does, it’s directed with conviction. Housing has been dead money for more than 6 years. With super low rates and American’s rich as fuck, it’s only a matter of time before home values explode higher.
Naturally, there are levels of explosion that needs to be acknowledged. The lower to mid-tier homes will enjoy small increases, due to socioeconomic factors. But the higher end is set to spring board higher, in my humble opinion.
I own just one housing related play, KIRK, derived from The PPT algos. However, I am very much interested in buying a number of names, hopefully on a meaningful dip.
Aside from refiners, I have two long term themes in mind:
1. Housing resurgence.
2. Healthy food.
An example of these themes is to be long WSM, BZH, PIR, WFM, BNNY and HAIN.
For the day, I am up another 1%, back near new highs, enjoying the splendour that is the stock exchange with all of its magnificent gifts.
UPDATE: I bought APKT