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KB Homes: Anatomy Of A Melt-Up (And Why I'm Adding To My Biggest Position)

KB HOMES and Market Psychology

KB Homes (KBH) is a mid-sized builder in the USA with a concentrated portfolio of housing developments primarily in California, Texas, Florida, and Colorado. Following the housing boom and bust from 2006-2010, this long-cycle industry has underperformed, seen its worst, and after multiple apparent starts and stops, we have seen an entirely new shareholder base emerge as the last group of holders finally capitulated after the most recent earnings reports from the group. It is unclear whether so many of the top minds in the investment community having retired (due to wealth, frustration, apathy, disgust?) has caused even greater inefficiencies as of late to exist, but the asymmetric opportunity with KBH is truly something to behold. When the top investors call it quits, there are less capable leaders managing large pools of money to create the normal "bottoms" we have seen historically in many stocks… Read More …