Gathering New Information about Stocks, Health, and Sports

          As many investors look into equity searches to diversify their portfolio, housing always comes up as an enigma especially with the so called bubble it has been put in. Coming off record sales and inventory numbers from a few years back, the housing market has struggled the past few months on increasing interest rates and a slowdown of the economy. As I type this, you may think I am foolish for even suggesting looking into housing venture as an equity investment, but on the contrary as an investor you should know to do the reversal of what everyone expects in this situation.
          Looking at a specific stock in Lennar Corporation (LEN) as just an example can define why now is a good time to invest in the housing market. Over the previous five years, after incredible gains of near 300% from 2002 to 2005, Lennar has appeared to depreciate in 2006 posting capital losses for investors of nearly 33%. Such a fall can be attributed to the increasing interest rates which make consumers wary to buy new houses. When prices are inflated and mortgages are at all time highs, there is going to be a cornucopia of unsold houses in the market which does not bode well for corporations such as Lennar. However, now with interest rates looking to be hiked for the last time and possibly even cut in the near future, the housing market may see the thrills shown during the glory days of a few years back. While everyone supposes that the economy is going through a recession, I expect a soft landing situation which does not affect the economy too negatively. With interest rates having a strong probability to decrease in the following months, buying shares of a housing company like Lennar can be strongly advocated at such a low price.
          While most any large capitalization equities will be adequate for potential investors, I chose Lennar for both its technical and fundamental aspects. Always having excellent margins in terms of growth in revenue and profit from year to year, I expect such earnings to continue to grow even higher. While the next few quarters may not be suitable to the envisions potential investors have, such news is already taken account of in this rational expectation market as the only indicators which should have any affect on the stock would be positive corporate news or a decrease of interest rates. With the probability of such statements higher than the negative sentiments turned into reality, Lennar should have now hit its low and continue its rise.
          Already grown nearly 8000% in its near 20 year career, housing will continue to be a tremendous factors in the coming decades and should prove to be no problem in terms of future competition or structurally ousted fundamentals. Supporting positive surprises each quarterly update, investing in Lennar, while of course risky during this stage of the economy, can become a tremendous asset this time next year. Having already felt the effects of the “housing bubble” sentiment, I can only see future growth in terms of shares for the company and capital gains for investors.

-Dennis Biray
September 4th, 2006