Perspective on Dow and Homebuilders
Although the last week managed to shake investor’s (over)confidence, it wasn’t long ago that all the talk was about the new records being set by the Dow. And with all the talk of a bursting housing bubble, one might wonder whether those stocks are still even around.
Which is why we were a bit surprised to see the 5-year performance chart common to SEC filings while we were reviewing the 10K of Small Cap Watch List (Track at Marketocracy), Mid Cap Watch List (Track at Marketocracy) and Large Cap Watch List (Track at Marketocracy) member (yes – all three – blame S&P for their overlapping market caps in the indices, which made it suitable for all three lists) NVR Inc. (NVR - Annual report).
The Dow has done very little over the last five years (though we don’t expect the next five to be much better) and, despite the rocky year the homebuilders had in 2006 there could be more room for declines ahead.
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