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Thanks for the link to the article. It's hard to tell if the writer knows what he's talking about. I've found that when journalists use numbers, they often reach the wrong conclusions.

Hovnanian's cash flow and balance sheet give it the prowess to do that. It posted $4.2 million in sales for fiscal 2004, which ended in October.

For starters, it's $4.2 BILLION not million. Shucks, $4.2 million would only be 8 houses in California. ;-)

Then, if you scroll down to the bottom of the article, for homes delivered, the jump from '03 to '04 was 25%. The estimate from '04 to '05 is only 7%.

The other chart, U.S. Housing Starts, it shows an expected decrease for 2005. And, of course, interest rates are headed up.

From the article: "Despite concerns that big home builders are due to hit a wall at some point, Sorsby sounds optimistic about the future.

"I think we'll see three, four or five years of very smooth sailing for home builders," Sorsby said.


That does it for me! If analysts are saying that everything is fine, we're all in trouble. ;-) Looking at those charts, I'd say maybe ONE year of smooth sailing before they hit the wall.

Too many negatives that I don't understand. I had considered buying into HOV but I think I'll pass.

Nice chatting with you. And by the way, we should meet here in one year to see where HOV is. And if we were totally off base. ;-)

Andy
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