With Lennar Corp (LEN) reporting a fabulous number -- one with a good earnings beat, higher gross margins and unexpectedly good deliveries -- we really have to wonder whether this time it is indeed different when it comes to this group.
When I got in this business, I used to hear the canard that the most expensive words in the English language when it comes to investing are, "this time, it is different." The theory of negativity? Only lightweights and knaves would believe that anything really could change over time -- and those who say it could be different are destined to be crushed.
The thesis would always be intoned by the graybeards, that group of people who knew better than you did. You dared them if you defended "this time is different" and you almost always did lose.
These days, though, you've been crushed by those words. You are simply on the wrong side of so many trades that you almost want to coin a new term, something like, "this time will be different."
Which brings me back to the homebuilders. We have seen their price-to-earnings multiple expand after each report this go-round -- and it's pretty amazing to see, especially given how often the homebuilding stocks folded after good numbers.
What's going on? Some will say that it is the good employment and low rate phenomenon. Lennar even gave those two as part of an answer about why things are indeed better when it issued its earnings this morning.
I think it is something different. I think it's the environmental laws that have been passed in so many districts around the country that a lot of the smaller builders have no ability to compete. Take a look at KB Home (KBH) . Its chief advantage is that it owns some of the last big plots of land that you can build on in this country.
That's just different.
It's not the way it was.
The facts changed.
I can come up with dozen instances where it is different.
But the bears refuse to lose the adage.
And it's costing people fortunes.