Jeff Gundlach's Bearish Homebuilder Call (In 1 Chart)

Tyler Durden's picture

While Jeff Gundlach's against-mainstream-consensus bearish call on the homebuilders (and over-rated housing recovery) will come as little surprise to regular readers of Zero Hedge, we thought the following chart might provide one more simplifying perspective on his call for lower prices in homebuilder stocks...

 

As Bloomberg notes, if history is any guide, the homebuilder ETF has fallen at least 10% from its Q2 highs during each of the last few years (even as the bull market progressed)

 

 

The chart shows the ETF’s closing prices from April 15 to July 15 annually since 2009, when the bull market started. The period’s biggest decline was recorded in the second year, when its shares fell 29 percent from April 23 through July 6.

“Single-family housing is overrated,” Gundlach, chief executive officer of DoubleLine Capital LP, said yesterday in a speech at the Sohn Investment Conference in New York.

He called for selling the ETF short, or borrowing and selling shares to profit from lower prices.