Then Things Changed

In 1,954 days, from March 2000 to July 2005, the stocks of America’s home builders went up a crazy 839%! Investors could not get enough.

Then, almost overnight, things changed.

Over the next 800+ days, home builder stocks fell 67%, and people could not sell fast enough. “Here take this, I don’t care what price you give me—JUST TAKE IT!”

Then, almost overnight, things changed.

In a matter of weeks, these stocks rallied 51% from their lows in March 2009.

I wonder how many of the people that lost so much were still around for the 51% bounce?

Of course:

• They still have a very long way to go; in fact, just to get even they would still need to go up by over 300%.
• The story is not over yet (they could go back down).
• Placing bets on specific sectors is not a good idea.

But that still leaves the question:

If you lost 60%, sold your stock, and bought CDs, how long would it take you to make 51%?

Tagged as: change