How the American Dream Can Double Your Money

Homebuilder stocks are primed for a run November 11, 2014 Archives | Unsubscribe     How the American Dream Can Double Your Money   Homebuilder stocks are primed for a run Bucking bad data Plus: An important update on the nickel closet   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner If you'd like to double your money over the next year, it's time to buy housing stocks. Sounds crazy? Keep reading... Sure, all the experts say the housing market is a graveyard right now. Mortgages applications are down. Home prices are still too damn high. Interest rates have to nowhere to go but up... And homebuilder stocks? Might as well flush your money down the toilet. They're down about 25% from February to October. And Bloomberg suggests they are "vulnerable to further declines." Yeah, yeah. Blah, blah, blah... You know what? We're not listening to any of it. Remember, like I always say, the biggest investing gains are made when everyone has written something off. That's housing right now. In fact, housing is going to be the comeback story for 2015. And I'll show you how to play it in just a minute. Seriously, if you load up on housing stocks right now, your friends and family will think you're a genius this time next year. So here's what's happening... After being given up for dead, homebuilder stocks are springing back to life right now. Since bottoming out on October 13th at $21.26, the leading housing ETF has surged all the way to $24.79 - in under a month. And this turnaround happened just as investors are turning sour on the U.S. housing market. But that's great news for you because you get to hop on that wave before anyone else. So why are so many folks thumbing their nose at housing right now? For starters, both Fannie Mae and Freddie Mac reported crappy third quarter earnings. And these earnings reports revealed some more scary numbers... "Looking at data from Fannie Mae, single-family mortgage issuance declined 43% in the third quarter from a year earlier with issuance for home purchases down 15% and refinancings down a staggering 61%," TheStreet.com reports. Oh, and there's also another tiny problem: No one's really buying houses right now. First-time home buyers have sunk to their lowest level in 30 years, according to the National Association of Realtors. So why buy homebuilder stocks now if the data is so horrible? Glad you asked... First, you should ignore most of these numbers. I've told you before that backwards-looking data like this aren't going to help you get in on the ground floor of a big change in trend. So home sales data, refinancings and first-time buyer numbers are already baked into the pie. These are known issues. Unless new data starts painting an even scarier picture, it's already priced into the homebuilder stocks. Next, we have a huge swath of the population that has delayed buying a home because of the prolonged recession. You've probably heard a lot of talking heads yammer on about how young people are dropping the ball when it comes to careers and savings. In fact, only 36% of Americans under the age of 35 own a home, according to the Census Bureau (that number was 42% in 2007). You can insert your own joke about texting or working a tech startup here if that's your thing. But the fact of the matter is this younger boom generation will eventually settle down, start families and, yes, even buy houses. And when the levee breaks, there are going to be a ton of young couples fighting over houses in a market where building hasn't really picked up from historic lows. That's a recipe for more building. And that's probably why this chart looks so good right now... After peaking earlier in the year, the SPDR S&P Homebuilders Index ETF (NYSE:XHB) couldn't get out of its own way. Investors completely gave up on the homebuilders late last month. But that was the final straw. The last sellers finally left the building. This capitulation move set up this week's big breakout. Now, it's finding its legs again. And XHB looks set to challenge its 2014 highs. Now's your chance to buy before this trend really gets going...         The World's Most Lucrative Opportunity Find out how an event destined to be bigger than the Internet could be the world's most lucrative opportunity for those who see this and act...   Get All the Details Now!           Rude Numbers Targets, Predictions and Wild Guesses   59% of all stocks trading on U.S. exchanges are now above their respective 50-day moving averages... 365 points were added to the Nikkei today. The Japanese index is now pushing back toward its year-to-date high of 17,500... $1,153 marks the spot for gold futures this morning. Friday's rally just can't seem to stick. The yellow metal is off by about $5 in early trading... $77.39 buys a barrel of oil today. Crude is hovering near its lows... will it hold? 2,036 is where you'll find S&P futures this morning. Stocks are set to open just in the green to begin the trading day...     Rude Trends When to Buy... When to Sell   You've schooled me on nickels this week, that's for sure. The idea is, you melt 'em down if things go south (zombie attacks, Sharknado, other terrible and unexpected events). The metal used to make a nickel is actually worth more than 5 cents. That's it. So why do I bring it up? As a refresher, one of my favorite readers wrote in the other day asking whether he should ditch his closet full of nickels and buy coal. Of course, I wanted to know what $15,000 worth of nickels looked like. And he didn't disappoint... Here's an update on some of the logistics related to setting up the now infamous "nickel closet" from the man himself. "You order them from the mint through your bank in $100 boxes of rolled nickels," our friend explains. "They weigh 25 pounds apiece which makes them difficult for the average little punk to steal them." So there you have it. Heavy and mostly punk-proof... Maybe we all need a nickel closet. [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]     Ignore At Your Own Peril Today's Must Read Links   What NEVER to Put in Your Child's Mouth [must see] The one safe the IRS can't crack 80-year-old "Executive Dividend Program" revealed     BE SURE TO ADD rude@agorafinancial.com to your address book.       Additional Articles & Commentary: Join the conversation! Follow us on social media:         The Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. 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