PD, so do I. The market has not yet priced in the severity of the slowdown.

Remember when Lucent was trading over $80/share? I think it even went to $95. It dropped to $5, and I thought that was the bottom, and bought $1,000 of LU. Then it proceeded to go down to $2.50. Who would have thought?

The same thing will happen to Toll Bros and the other builders. Toll, from its height of $60, is likely going to hit $1.50/share.

Some say it’s too well capitalized, they are too big to fail. They said the same thing about Lucent.

By the end of 2009, Toll could be a penny stock. Their outlook will worsen, as fewer people can buy their homes, and they have to write off more land options.

BTW, if its current price of $26, half off its peak, were so great, why are the insiders selling instead of buying?

I’m probably the most bearish on this board, daring to suggest that builders could be penny stocks.