I’m a retailer of manufactured homes here in So. Cal. I was also a principle in a company that we sold to chb years ago. In my opinion these stock are only good for a trade right now but not an investment.
This industry goes when they turn on the money and shut off when the financing dries up. There is nothing elso to consider fundamentally as to when they’ll do well. The last bull market in this industry was when abs (asset backed financing) really took hold and openend the faucets. In ’99 the industry shipped roughly 360,000 units. In 2000 they turned off the money. Last year I think we shipped 130,000 units, during the greatest bull market in housing. A lot of carnage.
Fyi, I see exactly the same thing happening in RE right now. Too much money chasing yields here creating overcapacity, fraudulent lending, and too lax lending criteria. I have no doubt the same cleansing is ahead for real estate.
Regarding Buffett’s forey into the industry…I have to admit I was puzzled. I’m a big fan of his and have read his biography’s. He’s made some mistakes in the past and as humbly as I can, I’d say this is one also. I think he purchased Oakwood out of BK not realizing how fruadulent their portfolio was. I believe he then bought Clayton to help handle the the giant Oakwood mess. I could be wrong though.
Fleetwood, formerly the cadillac of the industry is now so leveraged many believe it won’t survive. CHB just bought a modular company in England so what their thinking is behond me. Not too familiar with CAV.
Well I just thought I’d offer my perspective since it is a weird industry to try to understand. As for comparisons I think you’d be better to compare it to GM or F. Same type of finance driven, both are manufacturers, etc.
