Dancing with Bob

Robert Toll’s comments on December 5, 2006 lit a fire under homebuilding stocks...for a day or two anyhow. The numbers the company reported today were truly dreadful...it appears his “dancing” comments were a bit optimistic

Toll Brothers Chief Executive Robert Toll’s comments Tuesday that some of the luxury home builder’s markets appear to be “dancing on the bottom” provided a lift for the battered sector’s shares a day before a big industry conference.

The CEO, known for his candid views on the housing market, said nearly a year and a half into the current downturn, “we may be seeing a floor in some markets where deposits and traffic, although erratic from week to week, seem to be dancing on the bottom or slightly above. 12/5/06

Robert Toll was moving his lips again today on the conference call and on Larry Kudlow’s CNBC show after the market closed.

Lawrence apparently has given Robert a free pass on his show...it took Joe Battapaglia of all people to throw a little cold water on Robert’s comments.

We think Robert is a bit promotional.

That, of course, is putting it diplomatically.

Next week we will check in with Wayne Nef and re-visit the builders…

Again, I would not join in to the rally at this point, I believe this is a dead cat bounce. Once momentum starts to wane I would look to enter short positions across a basket of these stocks since I believe this downturn has further to go. Absorbtion rates in many towns in the Northeast have more than doubled and I believe there is good potential for more houses to hit the market in the spring. Housing prices have been headed down over the past year and I believe they still have further to drop.

The basket of stocks we covered in December are down since the interview.  In a ripping tape.

Don’t worry about Bob, the proceeds from his stock sales should tide him over....
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.  No positions in any securities mentioned above

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