As some of you know, I use to get trading research reports from a MAJOR Wall Street firm, I can't tell you how as they were for internal use only, I did not do anything illegal though. I thought I had a gold mine on my hands and read every one throughly, but in trying to follow the ideas put forth I was coming up totally empty-handed or worse. I finally gave up on them and just figured I wasn't smart enough to understand the nuisances of these research reports distributed to the trading desks. However when I found them on my computer six months later during some routine cleaning of my desktop I took a look again and nearly everything in those reports had come to pass, it just took a lot longer than i had assumed initially.
The lesson I learned way back then was that Wall Street works far out in to the future. What we see today may have been planned weeks, months and in some cases years ago. I have posted the homebuilders charts several times for you to see, HOV in particular was being heavily accumulated during the 2000 Tech bubble crash. It would have made no sense at all at the time, we just started the tech revolution, we didn't even have smart phones yet, it was dot.coms. Everyone at the time expected the next bull market would be another tech revolution, instead it occurred in the least likely of places, housing! Besides the housing stocks like HOV which gained about 2500% from the accumulation to the top, the entire bull market rally was supported by consumer spending which was supported by their home equity lines (abundant supply of cash). Of course this didn't end well, but the point is, after having just gone through the tech revolution and biotechs, who in their right mind would have thought housing which maybe was appreciating 2-3% a year on average was about to become the next bull market bubble. I know what the official stats say about how much housing gained since 2003 and how much it lost, I can just tell you our house was worth about 250% more than what we bought it for within a year and a half and when we bought it, we were already in the housing boom, we could have bought the house for 30% less a month earlier. This is the nature of Wall Street, they aren't reactive for the most part, they are proactive and acting on information that we'd have no way of getting.
Ask yourself, how did smart money know they should be accumulating housing stocks in 2000?
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