For those of you that remember there was a poster named Fairfield40 that had a strong argument for shorting. This was 2004/2005 and maybe into 2006 and he was shorting based on the looming mortgage crisis that he foresaw. No other short made such arguments so early. No other short (I mean you DBR) made such eloquent arguments.

Fairfield shorted a large sum in the 400's. He rode against the tide all the way into the 900's. He may have covered at a huge loss, and perhaps he covered at a small loss. However, it is improbable for him to have covered for an enormous gain. On a risk adjusted basis, it is IMPOSSIBLE, that he made a lage gain.

NVR is a short killer. Even in the worst recession in the history of homebuilding, Fairfield, the smartest short of all didn't make any money on this stock. Sure, some lucky SOB somewhere shorted at 900 and covered at 500. Most did not. Most, if not all of you, don't have the courage and discipline to not cover when the stock drops $5 in light trading.

My point is this: The only long term strategy that will work here is buy and hold. NVR will eventually resume buybacks given the options issued in the past few years. While they are reducing the share count, they will be growing profits. When the denominator drops and the numerator goes up - SHORTS LOSE. Every time. On Every Company. It is a mathematical certainty that increasing EPS faster than revenue will kill a shorts investment.

NVR has made money hand over fist in this recession. Are you really willing to bet your investment $$ thinking you are smarter than Paul Saville, Dwight Schar or Dennis Seremet? You are not. Benefit from their discipline and go long ...... or go broke. It is your call. If only you realized how stupid you are.

See you and $1250. When: (sooner than you think!)