NEW YORK (
) -- Jim, Lowe's reported solid earnings this morning. They even raised sales guidance. Now I know there was a little benefit from Sandy in there, but was their restructured pricing strategy to be credited?
You know they've been operating in turn-around mode for a long time. The housing boom is so great that everybody wins. It's a rising tide. Existing home sales are terrific. Also I think that Sandy is underestimated. Let me just tell you why. If you are to go in...let's say in a normal situation you have a catastrophic storm. What happens is on day one you get the storm, day two you pick up the pieces, and day three you call the contractor, and say okay listen, I want to get this done.
You're not allowed into a lot of the homes. Individual homeowners are not allowed into a lot of the homes in New Jersey because the infrastructure is so destroyed, the roads are destroyed, and the houses are destroyed. The National Guard won't let you there. They won't even let in contractors. They're letting in the contractor plus one employee, that's it.
So we don't really know the size of the damage, but the people I know who are down there are saying that it is just unfathomable how much business will be generated by this, in the wallboard business, in the tool business. I'd say that Sandy is going to be, beginning in December, a huge wind at the back of Lowe's, as well as Home Depot.
So does this benefit GDP then too?
I think so. I think so. Now, I mean, the federal government's going to have to do what we don't, as a taxpayer don't want them to do, which is support the infrastructure in all these places that, under the Stafford Act, where you could just basically say okay look, maybe you shouldn't rebuild these areas.
I interviewed Governor Christie Whitman recently, a former governor, and she said look, we were always debating whether to allow the construction where it is. But I think that one of the things that is the American way is you can't stop building.
So I just think that Lowe's has got a lot of things going for it. I think Home Depot does too. I think that these are excellent stocks.
Do you prefer one over the other here, I mean, Lowe's is a little bit cheaper?
I like Home Depot more, just because I think that the stock reported a great quarter, but it happened to have taken place during the fiscal cliff negotiations.