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December 03, 2007



Hi Reggie,

I've been following your blog for a while now and I would have to say you provide the most unbiased and straight forward research in the industry. Congratulations.

How long do you think Lennar is going to be trading in the $15-$20 range? If memory serves me right Enron imploded far faster than the home builders with with similar shenanigans. I don't quite understand the market euphoria behind Lennar's prospects of late. It seems to absolutely make no sense.




Thanks, and what the hell are you doing up at 5:46 AM? :-)

Enron was probably playing their games for quite some time before they got busted. If you have ever watched the movie "Usual Suspects", the character Virgil quoted, "The biggest accomplishment the devil ever made was to convince the world that he didn't exist".

I see Lennar falling at least to the level of their fully consolidated economic book level, which I made an off the cuff calculated guess at in the post above. As for when, who knows... The market is currently not trading off of fundamentals, or we would be in the midst of a massive correction right now and staring at a full fledged bear market! Patience and awareness are still virtues though, the last few major market corrections and bear markets were presaged by similar activity

quail hill

Since it appears many home builder investors either don't know about Lennar's off balance sheet shenanigan's and inventory valuation games or don't care, they may actually get away with trading at $15 to $20 per share while actually being insolvent.

turtle ridge homes for sale

The low price the venture paid is a vivid sign of how land values have plummeted with the downturn, precipitated by defaults on subprime mortgages and tightening credit that have led to a broader slowdown in sales.

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