Tuesday, October 30, 2007

U.S Housing

Ok so Buffet and many other deep value investors are starting to re-enter the housing market and some of you want to go against the herd and follow Buffets lead (and why wouldn’t you Buffet is the most successful investor of all time)...but which housing companies are going to survive? Which are going to fail? Which are going to thrive? There are some great companies out there that are certainly going to survive ie- HOME DEPOT, LOWES etc…However, are those companies going to thrive? What about builders? Which ones are going to continue to thrive? If you’re like everyone else out there you don’t know the answer to those questions (and neither do I). However, if you’re confident in the sector but not necessarily in the individual names of the sector you might want to check out the SPDR Homebuilders ETF.

“The SPDR Homebuilders ETF seeks to replicate as closely as possible, before expenses, the performance of an index derived from the homebuilding segment of a U.S. total market composite index. The Fund uses a passive management strategy designed to track the total return performance of the S&P Homebuilders Select Industry Index (the "Homebuilders Index" or the "Index"). The Homebuilders Index represents the homebuilding sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks regularly traded on the NYSE, American Stock Exchange, NASDAQ National Market and NASDAQ Small Cap exchanges (except Berkshire Hathaway). The Homebuilders Index is an equal weighted market cap index.”

The above description was taken from the American Stock Exchange

Year to date XHB is has already fallen 42.56%. Here are the top 10 holdings.

Home Depot - 4.44%
Lowes - 4.33%
Sherwin Williams - 4.75%
Mohawk Inds Inc - 4.99%
D R Horton Inc - 4.45%
Pulte Homes Inc - 4.62%
Toll Brothers Inc - 5.38%
Leggett & Platt Inc - 4.73%
Lennar Corp - 4.68%

It’s currently trading at almost exactly it’s net asset value.

(Disclaimer: As always please do your own research before making any purchases.)


MG (moneygardener) said...

very interesting...I'm going to check that out.


Housing is dead for now.