I'm up 130% now on my January HD puts placed just a month ago..
After the builders got slaughtered, the next wave is likely the consumer and retail stocks related to housing, wouldn't you figure?
Here in the UK, B&Q is like HD, and just got their clock cleaned when housing stopped rising. With a meltdown, the home stores will get destroyed.
What else? Make some picks here, I'm looking for shorts...
Shares of Home Depot were last down 1.5% at $33.86, the lowest price seen Aug. 16, 2004, and appeared headed for their eighth-straight loss.
Following a meeting with the home improvement retailer's management, Analyst Christopher Horvers at Bear Stearns lowered his second-quarter same-store sales growth estimate to 1% from 3% and his 2006 forecast to 1% from 1.8%.
For 2007, Horvers now expects same-store sales to decline 2% vs. his previous projection of 2.2% growth.
"One of the keys that we walked away from our meetings, and a change in tone that we noticed from previous conversations, is the steps that Home Depot is taking to prepare itself for the slowdown in the housing market,"
July 12, 2006
What other companies are going to get crushed by the housing meltdown (besides Home Depot)?
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Home Depot sucks plain and simple over priced low quality junk anyway, i was there last night, browsing for a new screen door, and the place was like a ghost town, and hardly any workers for help, great parking spot IMO
All the home remodeling guys are going to get slammed! No more Heloc machines for the granite countertops,etc. Als o the car dealers are going to get it worse. As it is they are, now that thhe home ATM is dry, no more Hummers and bling bling SUVs.
HEY KEITH
DO YOU STILL HAVE AAPL?
JUST CURIOUS IF YOU GOT OUT OF IT WHEN I TOLD YOU THAT IT WAS HEADING TO THE 50s.
HOPE YOU DIDN'T BUY MORE BECAUSE IT GOING TO THE 40s NEXT.
AFTER THAT, ALL BETS ARE OFF.
Keith,
If you have really made 130% take your money and run. Don't be greedy. That is an incredible return so LOCK IT IN.
Hummer
Very disapointed HD shopper.
At one time, I bought all drill bits from them (high quality) BLU-MOL.
But last time I went to get more, they didn't carry them anymore, instead they swapped out to another brand and hiked prices.
The new brand is much cheaper quality and at a higher price.
The hardware (locksets, etc.) has all gotten cheaper over the years.
Had one manufacturer insider tell me that the manufactures were 'forced' to cheapen most products to comply with the demands of the BIG-BOX buyer's requirement for large margin products at consumer perceived "low prices".
Result. Most everything from shower stalls to deadbolts have been made 'more disposable'.
The stuff is JUNK. It is designed to fail after a couple of years of light normal use. The sad thing is that the GOOD QUALITY PRODUCTS are no longer being made. Even items that appear to be high quality and carry 'premium' retail prices; have built in hidden defects (like using plastic gears) in high stress areas.
HOW CAN THE CONSUMER FIGHT BACK?
Stop supporting the BIG BOX stores and call manufactures and complain about the lack of quality. Research all of your alternatives.
For Example: When faced with a broken down plastic shower stall (in a home only 4 years old). I tried to purchase a direct replacement, only to find out that the model I needed had been discontinued. So, I bought 3 books on bathroom remodeling and custom tile; and tought myself how to design and install a custom tile shower. Done right using proper framing and masonary techniques (described in such books); You can get a shower that will last a lifetime (50+ years) and never leak again!!!! Make sure you use a good CPE membrane.
BOTTOM LINE: Beware that most all consumer stuff sold in BIG BOX stores is JUNK and that using this stuff puts you on a treadmill for the benefit of their future revenues and profits at your loss.
Home depot does sell junk. don't be afraid to take there junk back when it breaks.
furniture shops
escrow co's
appraisers
home inspection
realtor
restauraunts
travel
construction
high end designer crap
I agree the quality has slipped badly at HD, but it has in USA retail in general. Its a classic "race to the bottom".
Last time I invested in power tools, I insisted on DeWalt, as opposed to their private label discount brand at 1/4 of the price. The guy seemed to take this as an odd request, try 3 times to buy their "better deal" crap, said bad things about DeWalt, and then had to go get a ladder and take it down from a top shelf, blow the dust off, so I can buy it. I was paying $499.00 for quality tools rather than their $119 "special". I was left with the impression that they did not deal well with customers for quality anymore.
Point two: I had a faucet break and went to HD to buy the "highest end possible" for my high end house. The best they had was some cheap piece of crap for $198. I gave up and now go to a local plumbing supply place to special order Groh, HansGroh, etc. You don't find these at HD
Story in the WSJ today about HD vs. GE.
Basically the head of HD was faulted for doing three things listed in order from worse to last in my book:
- Stopped publishing monthly same store sales numbers
- Re-organized the executive stock option program to be based on earnings per share, not stock price
- Orchestrated the annual meeting to limit the time that a minority pressure group (unions in this case) and monopolize the proceedings
Interesting read. My opinion is that:
1: Plain wrong. Publish the same store sales monthly numbers. Why hide?
2: This is OK provided it applies to a broad section of executives (better employees in general) and is done for *future* options, not back dating current ones. (Move the future bar, not the previous one). It is arguable whether improvements in earnings will be reflected in stock prices, or stock prices reflect earnings conditions at any given time. (But in the long run do)
- It is criminal to allow a minor pressure group such as unions to hijack a meeting if they are very minor (or non) share holders. This is how the mafia in Japan operate, and unions in our country are no different in many cases. (Wheres Jimmy?)
Driving around today, watching all the people living in a false world of easy money. I started thinking where to make some dollars off this crash/slowdown. How about PODS. Its the company who supplies storage units for personal use. People downsizing, moving or need a place to store all that crap, while you live with family or friends. Any other thought out there to score some extra money off this change in society.
HD has indeed lowered itself to selling low end, cheap crap! My little local hardware store in town is now beating HD on price and quality. Sure HD and Lowe's will keep the price of a 2X4 at bare market minimum which the little guy's can't match. It’s with the odds and ends that finish up the job that they ream you. And I'm not just talking a little difference! Local hardware store in town is undercutting HD in nearest city by 50% plus and more on a lot of those same odds and ends! In many cases the quality is also better. Even if the price of a comparitive item is the same the little guy will carry a different/better brand.
I don't blame HD though. Like anon 8:43:51 said:.....USA retail in general. Its a classic "race to the bottom".
Its our fault too!
re: PODS
I thought of that, esp. with some people moving from houses to condo's.
My personal experience is you do this for a while since you don't want part with the crap, but after a while, you get sick of the monthly payments to store stuff you no longer use. Eventually, if cash flow crunch comes, the stuff goes up on Ebay, and the storage unit lease is ended.
Granite countertops at flea markets. . .
Will people tear out their countertops to sell at flea markets. . .can deliver them in their SUV's at $4 a gallon gas. . .Granite Countertops will be the "signature item" from the Housing Bubble - I think certain Calif and Florida Banks are great to short - Comerica shounds good to me - they have financed a whole lot of San Diego Condos.
Speaking of a "race to the bottom" in quality--it's not just tools and building supplies that have gone to pot. Anyone else notice how the quality of SHOES has gone downhill in the last few years now that they're all being made overseas?
the other HD...1920's technology and bling bling chrome are out in 07
Who sells those big ass tires and accessories for jacked up trucks?
When I go by a construction site here in San Diego, this is what I notice: the workers almost all have enchromed new high-end large trucks.
These aren't the actual company trucks doing truck-like work, but obviously the personal vehicles of the employees & managers, all sparkling clean without any dirt.
And they have those knobby off-road tires though I doubt they go offroad other than jumping a raised center divider or traffic island.
You can pretty quickly learn to discern which trucks are Hummer-equivalent penile replacement devices, and which ones are actual work trucks, i.e. bought by the boss:
The work trucks have stock tires and wheels, and are at the proper ride height.
Believe it or not the engineers at Ford & GM know, based on experience, what work trucks need for maximum performance and longevity. And yes, these ones actually do go "off road" into the construction site just fine with their stock stuff.
Not to mention that many of the huge knobby truck tires & wheels are illegal in vehicle code.
I'm shorting (buying puts on) Starbucks. It's the poster child for the 'we don't care WHAT it cost' type of shopper. $4 for a coffee.
Now, when things REALLY start getting tight, that's something you can skip (or fix at home for 10 cents).
The CEO has been selling bigtime, along with several other top execs.
With coffee and gas both about the same price...I'm betting people will buy the gas and skip the latte.
Saw this question written in the WSJ today:
"The lease expires on my 2004 Lincoln Aviator in December and I need to purchase my next vehicle outright. I would like to buy an SUV large enough to accommodate my new baby, new suburban home weekend shopping (e.g. Home Depot), my 45-pound dog and my very heavy handed husband. My budget is $25,000. Style, power and quietness are important (plus I've had a navigation system for 5 years now -- I'd like some bells and whistles). Should I go for a new "lesser" model SUV or a used higher-end SUV? Any recommendations? I'm considering the 2004 Land Rover Discovery.
-- Anna XXXXX,
Montclair, N.J.
Just reading this question (SUV, suburban home, new baby) convinces me that HD is screwed, as well as Lowes.
HD is cutting back on retail store expansion (100 vs. 180 stores/year) and is putting the money into a new wholesale concept that will sell their cheapo crap directly to builders and large companies. Talk about out of the frying pan and into the fire - LOL!
The new CEO at HD, Bob Nardelli, is a dipstick that couldn't cut it at GE so they showed him the door. At HD he has centalized store management and cut way back on the number of full-time staffers. It's no surprise that the stores are floundering. Managers are afraid to make any local decisions and the part-timers could care less about service and store maintenance.
When the hard times hit profits, my guess is they will give Nardelli the heave-ho. Of course he will leave with a big smile on his face 'cause the golden parachute will make sure he got his.
Uknow, I am concerned I am wrong about HD. I think it will be twice as bad for HD and Lowes' as most of us think. This housing bomb will cause a serious problem for HD and Lowes because of reverse herd mentality. As in 2005 it was the American weekend to shop at HD for the weekend, in 2010 HD will become the modern day KMart, avoided by all except those who have no alternatives.
Housing will be viewed as such a bad investment there will be little desire to do anything more to improve housing. Looking back 10 years HD was just a blip on the radar and a minor part of the total home improvement market.
When the hard times hit profits, my guess is they will give Nardelli the heave-ho. Of course he will leave with a big smile on his face 'cause the golden parachute will make sure he got his.
Nardelli is trying to run a retailer like a manufacturer. Manufacturers have few customers to please but retailers have millions of customers, each with their own idea of 'ideal' service. Running a retailer from pure numbers completely ignores the psychological part of 'retailtainment'. Every retailer who has ignored this has collapsed. The road of impersonal service and numbers' ran businesses is full of failed companies such as Montgomery Wards, Sears, Kmart, and in the future, Wal-Mart and Home Depot.
Little wonder why Lowe's and Target are strong retailers? They have mastered the personal touch. Lowe's will feel effect from the housing bubble but HD will be completely hammered.
What's wrong at HD? Plenty, and it has little to do with the pace of housing sales:
http://tinyurl.com/f5qkn
This is a publicly-traded company?
My oh my... Y'all rippin on Home Depot. Just a quick two cents worth ...Same Sh*t at Lowes. You can't buy anything of quality or value at these places. NOTHING. It can't be done anymore. They have us in a corner and that's where they aim to keep us. We sacrificed true value for cheap overseas pricing and lo and behold, you WILL be back because IT ALL WEARS OUT way much faster than it ever did. This game is over and they won.
How many Harley hogs fill up with HELOC? Buying leap puts on HDI.
HD and Lowes will never see the sales they did from 1998ish to 2004ish. Big builders and independent contractors were just buying it all up.
In the long run they will stabilize and sales will be consistent more so for service and repair of existing structures rather than new construction. Once the bubble is deflated the rental (apartment) market will boom and those units will need servicing.
HD has everyone by the balls because the local stores just do not offer such hours and ease of shopping.
BTW, if you want quality tools you should spend your vacation going to estate sales. I have pretty much all made in USA tools made in or before the 1960s. My dad's Kmart socket set from the 60s was made in Japan. Recently I bought a set of Craftsman drills from the 50s for $75 at an estate sale. New ones made of plastic cost over 100 bucks at Sears these days. These things have solid metal cases and only needed to have their cloth over rubber insulated wires swapped out with fresh ones in a thicker gauge.
HD will still be at the top in selling quickcrete, drywall board, plumbing misc, Berh paint, and gardening junk.
All the obvious ones are teken. So, I will suggest restraunts. Who will be eating out when their credit cards are past limit(from trying to cover their ARMs)? With gas going up, rising interest rates, and the ineveitable cascade of layoffs too many people will be eating USDA and restraunts will close.
I call these the third wave. First being builders, agents and brokers. Second being home improvement, remodelers, and furnsihings.
Third wave is pretty much everything retail that is non essential to survival.
globethistle.blogspot.com
Home Depot, Lowes and wall mart are all part of the capitialist monopoly complex strategy.
They force out the little guys with cheap prices then when everyone else is out of business they raise prices and lower quality - and they are the only shop in town by that point.
Similar thing used to happen in small towns with 2 or 3 gas stations.
The richest weasel would lower prices at their station and take a loss to put the competition out of business. Then when they have the only store they raise prices and recover their losses and then some.
globethistle.blogspot.com
>>>Who sells those big ass tires and accessories for jacked up trucks?
I always wondered what kind of an idiot buys a heavy duty 3/4 or 1 ton pickup and then reduces its load carrying capability by jacking it up and putting these tires on it. I carry a 5000lb camper with my Chevy 3500 Dually, and I stay with the stock steel wheels. No way am I risking my family with after market wheels not *tested* for 11,400 lbs GVW.
Kind of strange since you pay more for the heavy duty truck, get lower gas mileage, and a rougher ride. The reason for the trucks are load carrying and towing, both negatively effected by the after market wheels and lift package.
>>>I'm shorting (buying puts on) Starbucks. It's the poster child for the 'we don't care WHAT it cost' type of shopper. $4 for a coffee
I don't know, I own their stock and intend to hold. I believe the customers are "sticky" owing to the caffine addiction. I consider it a tobacco stock without the law suits ;-)
look for ever incresing demand for gambling and drugs. people seek distraction and hope in hard times.
globethistle.blogspot.com
Sony is toast. They are already not doing so well. The PS3 comes out in November at over 600 bucks. How many are going to buy at that price? When it does not sell Sony drops big.
AAPL is taost as well. Look at that chart Keith is is dreadfull. "Anyone see a trend here?" Seriously. It doesn't matter when or what price you bought that stock at (I know you will come back with that statement as you have before). How could you have been holding this for the last year? That's been a great great short, and YOU are long.
AAPL down 39% from all time high in Jan, our boy long and wrong.
What is bullish from here on out about AAPL? I live in NYC and I see plenty of people w/ Ipods, and the things break or the battery wears out all the time. I think the repurchase rate for many of these Ipod owners will drop. There really is no other direction for this stock to go but down. As Dennis Gartman says "from the upper left to the lower right" is the trend here.
Will people tear out their countertops to sell at flea markets.
Mark funny you brought this up, when i bought my house in 1993, it was a forcloser and the guy who bought it went crazy cause he was loosing it and ripped out all the cabinets and counter tops..which was fine at the time anyway less work for me to do..but you will see more and more of this for sure...see Dick and Jane the movie when (jim Cary) lost his job they took everthing in the house out and sold it ...including the front lawn,, lol
another nutty left wing movie directed at "Wall St greed"
another nutty left wing movie directed at "Wall St greed"
Ohh poor anono still wiping tears over the death of your loser friend right wing corporate theif ken lay..but as the saying goes all shit flows down hill.
You can pretty quickly learn to discern which trucks are Hummer-equivalent penile replacement devices, and which ones are actual work trucks, i.e. bought by the boss:
The work trucks have stock tires and wheels, and are at the proper ride height.
I just picked up a used Chevy 4x4 for pretty cheap. I think I'll trade up next summer when I can get a super-duper deal from a suburban loser who bought a nice 4x4 and is squeezed by the mortgage.
Having an ex who worked at a factory, it was interesting (and sad) to hear stories of her friends who lived in a 13' RV but had a $45k F250 lifted with super swampers. As soon as they would get fired for not showing up, the truck would go for sale with a "MUST SELL" on the sticker. Problem is many people (like me) don't want a jacked up truck that has probably been abused. Not only has the idiot lost the money on the truck, they have lost additional money for all the extra hardware they will now sell for nothing, not even accounting for the dedcution of resale for aftermarket accessories.
I would like to buy an SUV large enough to accommodate my new baby, new suburban home weekend shopping (e.g. Home Depot), my 45-pound dog and my very heavy handed husband.
What is it with SUV's and babies?
How have Detroit's mind control lasers created this bizzare estrogenic delusion?
YOU DO NOT NEED A SUV TO TRANSPORT A 35 POUND BABY
I grew up in the back seat of a 1967 Mustang, and it seemed big to me then.
Lady: you need a normal car, and your husband needs a small pickup truck, like the way the Toyotas used to be. Husband takes dog, you take baby.
Random musings:
>>>another nutty left wing movie directed at "Wall St greed"
I kind of liked it, even though I am against the typical leftwing hollywood bias. Can't deny what happened at some of these companies.
>>> Value of HD pickups that have been modified
I am the same way. I p*ss off lots of used car (truck) salesmen when they show me something with *anything* not bone factory stock and I dismiss it out of hand with "I don't buy anything that has been modified". I don't trust who did the work, the parts, and the mentality of the previous owner. I looked at a used SL500 at a Mercedes deal once that had a bogus SL600 badge on it, and the salesman did not understand why I did not want it, even after offering to take it off and put the proper badge on. His excuse it was from the previous owner, and my reply was "what else has he done?". I don't want a car from a loser who would do this.
>>> YOU DO NOT NEED A SUV TO TRANSPORT A 35 POUND BABY
Your right, you don't. What you need is a good SUV to keep that baby *ALIVE* after a crash. Lookup the nhtsa death rates per 100million vehicle miles, and Chevy Tahoe/Suburban are tops. 1/2 the deaths of Volvo's and other "safe" cars. If you where your seat belts and don't drink and drive, the death rate is 1/4.
(Lots of yahoo's drive SUV's, drink, don't wear their seatbelts, and get ejected in a rollover crash)
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