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De-teasing Sjuggerud’s “No. 1 Opportunity of the 2020s” Pitch

What's being hinted at as secret recommendations of True Wealth Real Estate?

By Travis Johnson, Stock Gumshoe, September 9, 2021


There’s been a little stirring of interest in real estate among the newsletter crowd again in recent years, most visibly with the launch of the Motley Fool’s Millionacres projects — investors are clearly interested in both publicly traded investments in the real estate space, and in “real world” real estate investments like rental properties (which also helped to create the current excitement for crowdfunding — a lot of the early private investment networks and marketplaces for small investors started out with a real estate focus).

And that’s probably a good thing — not much can beat real estate in the long term for inflation protection. Today, the big pitch I’m looking at is from Stansberry’s Steve Sjuggerud — he’s recruiting subscribers for his True Wealth Real Estate service ($2,500 for two years in this offer, no refunds).

That service appears to be brand new, but Steve Sjuggerud has been a real estate enthusiast in the past as well — I remember him pitching some more esoteric ideas like buying tax liens on the courthouse steps as the real estate market washed out after the financial crisis in 2009 and 2010, and talking up buying individual single family homes as rental properties in Florida, so the theme isn’t brand new… but it’s the first time I’ve seen him do a big promotion in a couple years, and he has a decent track record in identifying big trends in asset classes (at least in a general sense, I don’t know if his investment results always match his trend ideas), so let’s see what it is he’s pitching.

This is from the ad:

“I believe this is as good as any setup Iโ€™ve ever seenโ€ฆ in any sectorโ€ฆ since I began recommending stocks more than 20 years ago.

“Better than my call on health care in 2011, which led some of my readers to gains as high as 420%.

“Better than bank warrants after the financial crisis, which led us to 700% potential gains.

“Better than Asian stocks beginning in 2016 โ€“ a call thatโ€™s led to gains as high as 400% so far.

“Thatโ€™s why I urgently want to send you my newest research report with all the details of the stocks I just mentioned, called The No. 1 Opportunity of the 2020s: How to See 500% Gains in Housing Stocks โ€“ right away.”

I don’t know if he consistently picked great stocks or trends over the past few years, but those are real “wins” he has publicly had — I wrote about most of those ‘calls’ at the time, and yes, he did well with the China stocks in 2016, he made good biotech sector calls about a decade ago, and he did recommend those great TARP warrants when they were let loose on the market — he doesn’t get promoted as much as he did in the early days of Stansberry, I guess just because they’ve got a bigger bench now, but as I recall we covered a bunch of his teaser pitches from 2007-2012 or so. And yes, five years of writing articles is about what it took for me to consistently spell his name properly.

Much of the ad is the big-picture argument that housing, though it’s popular and some people feel like housing prices are in a “bubble” again because of the anecdotal evidence of crazy bidding for homes in some markets, is actually in the early stages of a massive growth cycle. I won’t make you suffer through the whole presentation, but here’s a little more from Sjuggerud to give you the flavor:

“Housing is popular, yes. And prices are up, no question.

“The average home price hit an all-time-high of around $373,000 in January.

“But thatโ€™s far from the whole story….

“… housing affordability is historically high. Itโ€™s been on the rise for years and remains well above the long-term average.

“One reason is that mortgage rates remain near historic lows.

“In inflation-adjusted terms, the mortgage payment on an average house is near the lowest level in 30 years.”

So his argument is that housing is not in some kind of unsustainable bubble… it’s mostly just that supply has been wildly inadequate for the rational level of demand that people have for a place to live. More from the pitch:

“Prices are historically reasonable.

“Mortgage rates are fantastic.

“And lenders are being cautious.

“So why does it look like a speculative frenzy?

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“Thereโ€™s simply nowhere NEAR enough supply.

“The deficit is historic. Itโ€™s been building for a decade.

“And the companies that fill it are going to make a fortune in the next few years.”

So he thinks the best homebuilders, and the important suppliers to the homebuilders, are going to continue to do very well — with “years of nearly guaranteed demand” and strong pricing power.

This sums up his big-picture argument pretty well:

“The housing fearmongers are giving us a gift.

“Theyโ€™re keeping the stocks we want to own relatively cheap โ€“ for now.

“But thatโ€™s not all.

“Theyโ€™re also setting up a situation not unlike GameStop.

“See, as housing continues its rise, the fearmongers are going to realize they were wrong โ€“ and that folks like us are making a killing.

“You know what happens next: Everyoneโ€™s suddenly wants to get in at once.

“Which is terrific news for folks who already own shares.

“This is the single best financial opportunity in the world today. And one of the best Iโ€™ve ever seen in 25 years.”

Which particular stocks are hinted at? Well, there’s no really aggressive tease about a single homebuilder, but several of them are shown in charts as past winners and not named, which kind of implies that he likes them well enough to keep them secret. Here’s one:

That’s D.R. Horton (DHI), the largest US homebuilder. Here’s the roughly matching chart from Ycharts:

And another is hinted at…

“Keep in mind, the last time we saw a market anywhere near this goodโ€ฆ you could have made 548% in luxury housing:”

That’s Toll Brothers (TOL), here’s the similar chart from YCharts as a match:

And the charts and hints continue…

“For example, one of these stocks โ€“ a homebuilder โ€“ shot up 490% the last time we saw a setup anywhere near this good:”

So that turns out to be PulteGroup (PHM), as matched by this similar chart:

Then we get into one that seems more explicitly to be a recommended stock that he’s teasing…

“Another shot up more than 1,600% beginning in the late 1990s:

“Yet today, itโ€™s trading for around nine times earnings โ€“ close to the cheapest itโ€™s been in decades.

“At one of the one of the absolute BEST moments for housing stocks Iโ€™ve seen in my life!”

We get some other clues about this pick, too:

“Shares could nearly double and still be cheap. Reaching the same valuation they saw during the last housing boom would mean climbing nearly 659% from here.

“And thatโ€™s before you consider earnings growth from the coming boom โ€“ where theyโ€™ll enjoy pricing power and incredible economies of scale as they build.

“See, this company is building in the highest demand areas in the country โ€“ with a heavy focus on Texas and Florida….”

And apparently they’re also doing something a little different, which perhaps the market doesn’t fully appreciate yet:

“Theyโ€™ve taken a cue from one of their most successful competitors โ€“ and begun converting to an ultra-capital efficient business model.

“In short, they donโ€™t tie up lots of money buying vacant land where theyโ€™re not ready to build.

“Instead, they hold low-cost options on tens of thousands of vacant lots โ€“ which they can quickly exercise whenever theyโ€™re ready and get to work quickly in the areas of highest demand. All without tying up lots of cash.

“The competitor that pioneered this model has shot up nearly 50,000% all time โ€“ enough to turn every $10,000 invested into $5 million.”

That competitor Sjuggerud refers to is NVR (NVR), the longtime belle of the ball among housing stocks, at least for long-term investors. NVR was really the pioneer of the “asset-light” model, buying options on land instead of accumulating vast tracts of land to build future subdivisions, and it has meant they’ve been hurt less in downturns and have been able, thanks to that nimble balance sheet (they didn’t have to borrow a lot of money to buy land), to generate much higher returns on equity for a long time.

My favorite housing stock bet as a new and emerging competitor has been getting a growing chunk of my portfolio partly because they’re following that NVR lead, too, but they’re not the only ones — lots of homebuilders have seen NVR’s performance and have said they’re going to get that religion. They’ve said that before, too, and it hasn’t stuck, so we should be cautious — but it is at least a good sign that they’re trying.

So which one is it that Sjuggerud is teasing here? It’s not my favorite housing stock, that one has only been public for six months or so… no, this is another strong and leading player who’s been around for a long time… that’s a very good match for Lennar (LEN), here’s my chart to match Sjuggerud’s:

And yes, it is trading at about 9X trailing earnings… and if analysts are right about the future and Lennar earns $13.72 per share next year, the forward PE is down around 7.

That’s not all that unusual for a highly cyclical industry, of course — and the fact that we’re trading at valuations like this essentially means that most investors are betting we’re near peak earnings, and they don’t want to pay a growth multiple for earnings that aren’t actually going to grow.

What if the boom continues for a while, and the market demand for new housing remains high, as Sjuggerud expects? Well, then maybe sentiment shifts, and Lennar earns a higher multiple as investors begin to trust that growth… and that’s what drives exceptional returns in the stock market, as we saw with technology stocks last year: You get the earnings growing, and you also, because investors get more interested in the sector, get the multiple going up.

The conventional wisdom with homebuilders in past cycles has been that you buy them at 1X book value, and you sell them at 2X book value — they’re very cyclical, they buy a lot of land during boom times to support their home construction ambitions, and they get clobbered in the down times when the land stops rising in value (or falls) and they are encumbered with a big chunk of debt but have fewer customers, and a lot of unproductive land just sitting on their books.

That’s not as true anymore… the cycle hasn’t been abolished, to my knowledge, we’ll still have rising rates and recessions at some point, the housing market is booming now but it will fall at some point again… but the focus on land ownership is being reduced a little bit, at least by homebuilders who are looking at NVR’s past success and licking their lips a little.

So some of the other homebuilders have begun to drink NVR’s Kool-Ade — they’re talking about becoming more efficient, they’re taking on less debt, and they’re focusing more on return on equity and, in some cases, eschewing big land purchases and using lot purchase options instead. Will Lennar and the others stick with this discipline? That’s been a major challenge — it’s very, very tempting for homebuilders to buy up lots of land because that gives management teams comfort, it sets them up with inventory to build for a long time, and there just seems to be something in the makeup of homebuilding companies that makes them want to own land, so that strategy shift hasn’t often really “stuck” before, despite the fact that everyone has seen NVR’s success.

Might that smooth out the cycle a little bit for investors, and make it easier to ride out the next crash? Not necessarily, NVR fell just as much during the 2006-2010 real estate crash as everyone else — it just fell from a much higher level, so it has helped NVR to build more value over the long term, less influenced by cycles land prices and its balance sheet. But if the tide turns, you do have to choose whether you’re going to be nimble, trying to get in and out of these kinds of stocks, or whether you’re going to be patient, and count on the best stocks to continue compounding their value over time even if they stink during the down cycle.

Here’s what that looks like in pictures, since we’re going chart-heavy today — this is the return on equity (ROE) for some of the major homebuilders over the past 25 years. You can see that it’s awfully consistent outside of the big bust/recovery cycle of 2006-2011 for most of them… but NVR in purple really stands out:

And if you zoom in a little you can see the trend, in the past six years, of many of the other companies beginning to bring up their ROE… though Lennar still trails behind.

What if we use that older valuation metric of price to book value? Here’s what the price/book valuation has looked like for these firms over that same 25 years — by that metric NVR, with its lower book value because it buys options instead of land, has always looked crazy expensive in comparison to its peers (and those peers are still mostly in an “average” valuation range:

But what does that all mean for investors? That’s what we really care about, right? Here’s the total return that shareholders have enjoyed in those companies over the past 25 years — again, that’s NVR in purple:

Most of those have beaten the S&P 500 very nicely through a few cycles now, building huge value as they’ve begun to consolidate the still very fragmented US homebuilding sector… among that group, only high-end homebuilder Toll Brothers has trailed the S&P 500, which had a total return of almost exactly 1,000% during those 25 years… but what really jumps out is that NVR’s leaner operations have generated dramatically better returns than those peers.

There are not a lot of companies you can dream up who have done better than NVR over that time — Apple (AAPL) is one, of course, with returns of about 175,000%, but that’s the rare survivor of several cycles of tech disruption — Microsoft (MSFT) has returned “only” about 6,000% over those 25 years, Intel (INTC) only about 760%.

Doing a simple thing really, really well, consistently getting a high return on equity, and sticking to your strategy through cycles, can work wonders for well-run companies. You just have to let it compound. And, of course, find those well-run companies. NVR is pretty big now, with a market cap of $18 billion, but it’s still much smaller than Lennar (LEN) or D.R. Horton (DHI), and in the context of the huge US housing market it’s really not so big at all.

So his leading pick seems to be Lennar (LEN) in this space right now, probably in part because of that strength they have in Florida and Texas and other high-growth areas of the country, and Lennar, while it has a slightly smaller market cap than D.R. Horton (DHI), which is primarily known for being stronger in the first-time homebuyer market, is actually the largest homebuilder in the US if you go by revenue.

I would not try to talk you out of either DHI or LEN shares, both are really well-run, have extremely low valuations, and will do well if housing continues to explode. Neither has really committed to going “asset light” to the extent NVR has, but Lennar is certainly talking more about that strategy recently. It’s not necessarily a clean break between the land owners and the “asset light” builders, most do a bit of both, so determining the future strategy and how much you trust management is a bit of an art. If you’re going to buy a big homebuilder, Sjuggerud’s LEN is probably a fine choice, I just haven’t researched it enough to be comfortable about distinctions between them, DHI, or PulteGroup (PHM) among the biggies (and there are, of course, also dozens of smaller homebuilders, including Meritage (MTH), KB Homes (KBH), Taylor Morrison (TMHC), LGI Homes (LGIH) and Tri Pointe (TPH), as well as my favorite NVR imitator, Dream Finders Homes (DFH)).

Interestingly, you can buy into the companies who serve these builders or develop the land more directly as well — Forestar Group (FOR), which is 75% owned by DHI, is a lot developer, they buy up the land (so DHI doesn’t have to hold it on their books) and sell the developed lots to the homebuilder. I wouldn’t recommend it, the stock is no cheaper than the homebuilders, has a low return on equity, and hasn’t gone anywhere in a dozen years, but perhaps it can stand as at least a reminder that there are lots of players in the business — just being involved in land and homebuilding in a good housing market doesn’t automatically mean you’ll mint money. And there are subdivision developers as well — I bought shares last year in a company that’s turning old military bases into new suburbs in land-thirsty California communities, mostly just because I think the land is more valuable than the stock right now, and that company, Five Point (FPH), was spun out of Lennar about five years ago and performed disastrously for investors until development started to pick up the pace last Summer.

And apparently Sjuggerud has some other ideas as plays on the persistently hot housing market he sees in the future…

“Iโ€™ll also tell you about two more housing stocks I havenโ€™t mentioned yet. Theyโ€™re not homebuilders. Their business model might be even better.

“See, they swept up tens of thousands of homes at fire-sale prices in the wake of the last crash โ€“ and now collect a massive income stream from renting them out. Think about that. They already own the cash-gushing assets. Which means their future profits come with very little incremental cost.

“Theyโ€™re the royalty companies of the housing market. And theyโ€™re easily one of the best ways to profit today, with NONE of the hassle of being a landlord yourself.”

That’s a reference to the single-family rental REITs, a type of company which didn’t really exist before the 2000s — but easy access to capital, a huge inventory of available homes in foreclosure in 2009-2010, and improving technology systems for managing geographically dispersed properties helped to build a new sector in the REIT world, giant companies who buy thousands of homes, clean them up, and rent them out, just like generations of strivers have been doing in every town in the country for generations.

I don’t know which ones Sjuggerud might like, he doesn’t really provide any clues, but the two biggies who have survived the consolidation of the sector are Invitation Homes (INVH) and American Homes 4 Rent (AMH), both of which are pretty large now, and are actually resorting to building new homes for rent in some areas, as inventory for expansion remains otherwise low.

I’ve been skeptical of these companies and their competitors over the past dozen years, since it seemed so terribly inefficient to be buying up thousands of different homes in different neighborhoods across different regions of the country, and because they’re generally highly levered (though not as levered as the average person who uses a mortgage, certainly), and typically pay low dividends for REITs (1% for AMH, 1.5% for INVH)… but they have grown quite large now, and they are making it work pretty well. And if housing is rising dramatically in value, well, they own a lot of it. There’s an interesting take on these two and the sector from Hoya Capital here at Seeking Alpha from earlier this year, if you’d like more detail.

These could theoretically either work kind of like homebuilders, with cyclical surges and falls, or they could smooth out the cycle by selling homes when they’re expensive and buying them when they’re cheap, or even just from maximizing the cash flow from rentals rather than continuing to accumulate assets at higher prices, but they seem focused on accumulating assets for now.

Those single family rental REITs, by the way, have just now ticked over to outperform the big homebuilders over the past year — but over the past several years they trail the homebuilders pretty meaningfully… one reason for possible optimism is that they did not fall quite as much in the March 2020 COVID crash, and they are generally less volatile than the homebuilders.

Here’s another chart if you’d like to see that in action, this is the total return since 2017 (when Blackstone took INVH public) — that’s AMH and INVH at the bottom, in brown and purple (if you take the chart back to 2013, when AMH started trading, the pattern is similar):

Not my favorite part of the sector, but yes, in some ways it’s like accumulating a lot of homes and collecting a small royalty on them… and the growing power of technology in real estate, with online closings and “smart home” controls and other advancements, does give them some potential to become more efficient and effective.

And, of course, they probably also amplify the cycle as they cause some problems for first-time homebuyers, since they buy up houses so fast, sight unseen, that then those folks looking for lower-cost entry-level homes are forced to rent from the company who outbid them and keep looking, which in turn creates yet more demand for new homes for people who really would prefer to buy.

But wait, there’s more! Sjuggerud also hints at a few stocks that are impacted by the housing market, but less directly, and that might have much more potential growth than the big homebuilders. He likens these to Home Depot, which has obviously been a spectacular investment…

“Home Depot stock is a 16,000-bagger all time.

“If youโ€™d bought $10,000 worth of shares back in 1981โ€ฆ youโ€™d have over $160 million to retire on today….

“And thatโ€™s the power of the kinds of stocks I want to show you right now.

“Stocks that fuel not just housing, but all kinds of construction and infrastructure work everywhere, in every kind of market.”

There are a lot of construction and infrastructure-related stocks, so which ones is he hinting at? These are the clues:

“Companies that dominate their market niches. That youโ€™ve probably never heard of unless youโ€™re a builder or contractorโ€ฆ and wonโ€™t come across on your own.

“Like… a company that primarily makes exterior siding for houses.

“Itโ€™s up more than 2,100% during the worst decade for housing in half a century.”

That’s a reference to this stock’s performance during the 2010s, and yes, he does show another chart — I’ll spare you more images, but that’s James Hardie Industries (JHX).

I’ve never looked at this one before, it’s got a pretty steady history of decent revenue growth but inconsistent margins. They trade at a pretty stiff PE ratio in the high 40s, with strong revenue growth and consistent gross margins, and they’re actually pretty big now so they probably have some pricing power within the industry — analysts don’t offer EPS estimates for James Hardie, but right now they are valued at about 30X EBITDA, and about 17X forward EBITDA. I don’t know anything about the business, maybe it’s really powerful and will continue to have shocking growth, but at first glance that strikes me as pretty expensive.

And another…

“… this business makes cranesโ€ฆ liftsโ€ฆ and equipment for handling building materials. Stuff you need not just for houses but pretty much any type of construction project. As you can seeโ€ฆ it skyrocketed 1,500% in about four years during the last housing boom. Yet itโ€™s around 1/30th the size of Caterpillar! Now, shares have started taking off again. And 10-bagger gains are possible from here.”

That’s Terex (TEX), which was indeed one of the huge beneficiaries of the last housing boom in the mid-2000s… though it has been very volatile since, and hasn’t yet gotten back to half the price it traded at near the peak in 2007 (revenue peaked at around $9 billion that year, and is now down at about $3 billion). I don’t know the story of why this business has shrunk so dramatically over time, other than the obvious slowdown of work in 2020, maybe they’ve offloaded divisions or reorganized or lost a big customer or something, but right now it’s again fairly reasonably valued at about 11X forward earnings, with revenue expected to get back to the $4.5 billion range over the next couple years.

One more? Fine, if you’re not too tired of me yet I can stand to sniff out another… here are Sjuggerud’s clues:

“… a company that makes โ€œboringโ€ things like cementโ€ฆ ready-mix concreteโ€ฆ and crushed rock.

“Ohโ€ฆ and with a heavy focus on booming warm-weather housing markets like Florida, Texas, and the Carolinas.

“Itโ€™s shot up 500% the last time housing got this hot.

“Now, itโ€™s selling its main product for 43% more than a decade ago โ€“ and entering a period of off the charts demand from road constructionโ€ฆ warehouses and data centersโ€ฆ and the boom in ‘green’ construction.”

All building is local, homebuilders focus on building up a meaningful presence in a local market because they know that getting workers and specialists and equipment and materials concentrated in a region makes things a lot more efficient… but that goes double for cement and rock, for which a huge amount of the end user cost can be transportation if your work site isn’t close to the quarry or cement plant. You can’t move into a new market for aggregate or cement without building big expensive plants or spending a prohibitive amount on transportation, so this sector often tends toward oligopoly, with local monopolies. That’s good news for established leaders when demand rises faster than input costs.

So which one is this? That’s Martin Marietta Materials (MLM), which did indeed rise about 500% during the run-up to the housing crash in 2007 — a substantially stronger run than some competitors had at the time, like Vulcan Materials (VMC) or Eagle Materials (EXP). That outperformance has not continued over the past decade, VMC and MLM are essentially tied together in a three-legged race and Eagle Materials has run faster and been far more volatile, but all three (and several other basic materials stocks) have done well. Especially over the past year and a half.

Right now, Martin Marietta Materials is trading at about 5X sales, far higher than it has been in the past, and 30X earnings, which is actually not particularly high for them (it was in the 40s and 50s from 2010-2016 or so, as the stimulus construction surge from the last crisis washed through the system, though probably averaged about 20 before that). Analysts are projecting earnings growth of 25-30% for the next few years, and it’s always possible that a continued surge in the housing market and construction spending will mean they do far better than that, but if you trust the explosive potential of this cycle it might work out well — that puts them in the “very reasonable” part of the Growth at a Reasonable Price camp, trading at about 30X earnings with near 30% growth. I have other infrastructure-related names that I like a little more, and my impulse is to like the homebuilders more than the materials companies at current valuations, but I wouldn’t try to talk you out of MLM or their competitors.

So that’s what we find, dear friends — those are the multitude of stocks that Sjuggerud is hinting at as big potential winners, and as the focus of his special reports The โ€œFat Pitchโ€ of a Lifetime: 1,000%-Plus Potential in the Infrastructure BOOM and The No. 1 Opportunity of the 2020s: How to See 500% Gains in Housing Stocks.

I find the general argument pretty compelling, I don’t have a crystal ball that tells me when the next crisis will come, but absent a crash and another prolonged recession I do think that the huge need for more housing after the under-building of the past decade and the demographic shifts as the millennials enter their prime home-buying years should rise the tide in the whole sector, lifting pretty much all of the boats over the next few years… and that most of the stocks in the homebuilding group are pretty attractively priced. I have already bet on it to some degree with Dream Finders Homes (DFH), my favorite little growth homebuilder… but most of these, even the companies that aren’t particularly impressive or unique, could do quite well.

If you want to stick with a sector bet, there are a couple reasonable ETFs in this space — there’s the S&P Homebuilders ETF (XHB), which has a heavier weighting in some of the ancillary companies like Lowe’s, The Home Depot and Floor & Decor, along with plenty of homebuilders and suppliers, and for the more construction focused there’s the iShares US Home Construction ETF (ITB), which is more aggressively weighted in the actual homebuilders (the top four holdings, 40% of the ETF, are D.R. Horton (DHI), Lennar (LEN), NVR (NVR) and PulteGroup (PHM)). Those two ETFs have traded in lockstep over the last three years, but if you go back further the heavy weighting on homebuilders has let ITB to do substantially worse than XHB during the 2007-2012 period, which means the long-term returns are better for XHB (avoiding the worst of a downturn is often better than getting the best of an upturn), but ITB has been the clear winner over the past decade and probably still offers more levered exposure to continued housing demand.

That’s what I think, anyway. How about you? Interested in the homebuilders, or the suppliers or construction equipment companies or any other ancillary plays? Agree that the housing market is primed to be strong for the next several years, or do you think a bust is in the cards? Let us know with a comment below… and thanks for reading!

P.S. Sjuggerud does also say that he is partnering with Crowdstreet to recommend specific non-public investments in real estate projects for accredited investors. That site is freely available, I have no idea what due diligence Sjuggerud will add beyond what Crowdstreet provides, but it’s a viable option for some folks — there are plenty of competitors in this space, too, providing financing to real estate projects. The biggest competitor that I have some experience with is Fundrise, which I’ve invested with a bit over the years. Fundrise works in a similar vein, as I see it, through more of a private REIT structure, and doesn’t require accreditation and has much lower minimums, so options like that might appeal to some. Crowdstreet offers deals that may have higher upside participation and require larger investments, like the current offering to finance a hotel’s construction in Miami. I’m not particularly expert in the ins and outs of real estate investing, and definitely have no interest in the oversight and diligence required to bet big on specific building projects, but in general I’d say that the private REITs and private real estate financing deals you can access through these kinds of platforms are easier and more accessible than buying real estate on your own, and have higher returns than you can get through the public markets… but you pay for that, in part, with the lack of liquidity, sometimes tying up your money for several years, and often with a lack of diversification that means you’re talking more risk.

Disclosure: Of the stocks mentioned above, I own shares of Dream Finders Homes and Five Point Holdings. I will not trade in any covered stock for at least three days, per Stock Gumshoe’s trading rules.

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ndgt10
ndgt10
September 9, 2021 5:42 pm

The 1st and last 2 you listed plus PHM

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ndgt10
ndgt10
September 9, 2021 6:27 pm

Yep, you nailed the infrastructure report with the other 3 you mentioned plus URI.

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Glen Buick
September 9, 2021 6:01 pm

Cannot thank you enough for this – I read Sjuggerud’s pitch with great interest, but except for NVR got few real clues. I found his argument pretty strong, and your helpful elaboration a godsend. Now, if I can just overcome my well-established procrastination, I’ll become an Irregular!

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beachwind
beachwind
September 9, 2021 8:24 pm
Reply to  Glen Buick

Good choice becoming an Irregular. Honestly worth it for the Friday File alone. Also nice when you can read the quick take to see if the rest of the article sounds in line with your investing interests.

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kkvadivel
September 9, 2021 10:39 pm
Reply to  beachwind

Third Beachwind!!.Even I got subscription like Barronsโ€ฆstill I think Irregular is real worth to manage my portfolio. Thanks Travis and team..

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eleanorxduval
eleanorxduval
September 9, 2021 9:59 pm
Reply to  Glen Buick

Second Beachwind. Becoming an Irregular is one of my best investments.

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timcoahran
Irregular
September 9, 2021 10:39 pm
Reply to  Glen Buick

Well worth it~!

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youwannabet
youwannabet
September 10, 2021 12:27 am

Thanks Travis! I really enjoyed reading your take on the housing sector. I bought some NVR a while back and intend to hold it long-term through thick and thin. I like LEN and do intend to buy and compound the dividends for the long -term. I heard about DFH from you, sounds very interesting, and I may start building a position.

As for the housing market direction, it all depends on the rise/fall/rise/fall of Covid 19 and vaccination rates.

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James corcoran
Guest
James corcoran
September 12, 2021 12:34 pm

short supply n millenial demND ARE STRONG FACTORS……

Ron Morris
Member
Ron Morris
September 10, 2021 12:31 am

Iโ€™m pushing 85 years old and go all the way back the first financial newsletter published and, in my opinion, Steve Sjuggerud is the best all around stock analyst on the planet, Dr. David Eifrig the best fixed income analyst around. Iโ€™ve been with Stansberry Research from very close to their beginning and they are the best group Iโ€™ve followed in over 50 years. The incessant advertising drives me , possibly because Iโ€™m a grouchy old man. Hey, if you donโ€™t want to pay the $5,000, reduced to $2,500, then get get the extra free year, you can do what youโ€™re doing now, just check in with 0lโ€™ Travis. Iโ€™m a lifetime subscriber to several of the Stansberry letters and itโ€™s been well spent. I figured out at age 32 you canโ€™t analyze 5,000 stocks, itโ€™s a lot easier to analyze the analyst and let them do the heavy lifting.

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Sargam
Guest
Sargam
September 10, 2021 1:33 am

Am guessing Stansberry has cut back on promoting his teen-idol and surfing mentor Sjuggerud after a few embarrassments. Tencent went south a few years ago after Sjuggerud started raving about it, and a biotech Co. fell off a cliff earlier this year a few days after Sjuggerud singled it out for special promotion. But the worst was February 2020, when he told his investors to go “all in.” Stansberry didn’t fire him but Sjuggerud took a long vacation.

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Tacman
Member
Tacman
September 10, 2021 9:29 am

Iโ€™m happy for Ron. However, at 90 and having been in and out of Stansberryโ€™s several times in years past, I never profited much. Sjuggerud, I know best for his emphasis on coins. In this case, considering the price of building lumber, Iโ€™m surprised heโ€™s not touting the timber industry again, as I remember from years past.

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charlespeterson
Irregular
charlespeterson
September 10, 2021 10:42 am

Thank you Travis – you always amaze me with being able to ferret out the stocks that are being promoted and provide great back up information on them! I am a long time subscriber and continue to recommend you to my friends.

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orangutan
Member
September 12, 2021 9:03 am

I bought True Wealth Real Estate service days ago. Enjoyed Travis de tease afterward. I am real estate lite
these days in my happy condo in Florida and a summer beach apartment up north.
This service will help me invest in stock plays and intelligence on private investments on Crowdstreet. I am very pleased with the first report from True Wealth Real Estate. I like uhal, invh, len, amh, phm.
looking forward to doing some private deals. Downsizing and selling the manse, the money still needs to be in real estate plays that don’t take up my time. Getting OTD (older than dirt…;)

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Daniel
Daniel
September 12, 2021 11:46 am

I’ve held BLD and BLDR this year. Great returns and happy with management of both. They are buying back shares and doing acquisitions.

I looked at EXP and VMC a little too wobbly for me.

I’m interested in NVR.

I have some LEAPS I’m looking to grab the rally for the next few earnings cycles, then maybe I’ll stick with a stronger long-term position.

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bihiselo
bihiselo
September 12, 2021 3:09 pm

First, thanks for your consolidated thinking for the real estate sector. You help us unpack the meaningful stuff right here in a few paragraphs.

A few words about MLM. This company has served the federal sector –especially space projects (think shuttle launch project in Lancaster, California). Their past relationships and partnering arrangements could serve them well in the days ahead if the federal government pushes large infrastructure projects (requiring concrete and master constructor experience). This work experience may prove to be a competitive advantage in task order contracts delivered across the country. However, energy requirements are typically met with Coal and nat gas. Both provide a ready supply that, ironically, will be used to meet “green” targets. Lots to watch in the supply chain for this company or any other one that desires to be the supplier of concrete. Last, adequate strength in concrete may be limited by available supplies of angular sand. With all these contingencies, investment in MLM may not be as sexy as a software startup that has such a low cost of goods sold.

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