What do these stock charts tell investors?

[Danny Webber]

New home builder stock charts. What do these mean to investors?

Best analysis!

[Mike Burkett]

@Danny Webber @Jay Hinrichs  The price of a stock SHOULD, theoretically reflect the future discounted cash flow of a company.  Let's assume this is true for these particular stocks, then the market is telling us that the future cash flow will be less than previously anticipated.   Either revenues will decline or expenses will increase, or a combination of both. 

To Danny's question, what does this tell us?  Look at a 20 year chart of each of these stocks.  When was the last time a similar decline occurred?  ALL of them had a similar decline in price in 2006-2007.  And we know what happened after that.

Is that what we are in store for?  I don't think so.  Credit underwriting today is far more restrictive than it was in 2004-2007 and there is significantly more equity held in residential real estate than back then.  Are we in for a slow down?  Probably.  Are we in for a recession?  Maybe.  Be prepared.  Keep sufficient liquidity and don't be over leveraged.  

If a thunderstorm is coming, don't go the golf course swinging a 1 iron.