D.R. Horton ( DHI) reported decent numbers Wednesday, and most importantly, its unit orders were up 28%. However, the bears are not writing about these orders the same way they commented on Toll's ( TOL). Horton delivered 50,000 homes, compared with 9,000 for Toll. Now, you tell me what's happening in the housing market.

I don't think that many investors, not even the sell-side analysts, are aware that what really happened at Toll was a management mistake. They simply filled out existing communities too quickly last year. That maneuver gave them monster numbers then, but is a big problem today. Don't base your opinion of a $200 billion industry on Bob Toll's comments. Look at the entire group.

Hmmm. Horton orders up 28%, Beazer ( BZH) up 15%, Hovnanian ( HOV) up 38% and Pulte ( PHM) up 20%. What am I missing? Seems as if most of the large public builders are managing the current slowdown just fine.

I know that the real estate bull market is over. I have been incorrectly forecasting this for five quarters now. It's about time. Housing demand and prices have flattened. But if you keep reporting that as news, you need to buy a clue.

But, just as with the steel sector, high-quality housing stocks can trade up big in a soft landing. Don't get bummed by the incessant bearishness of the sound-bite shorts. The sector is too cheap not to own.

Once again, if the sector implodes, the builders have index-type downside. If it undergoes a soft landing, another big trade into spring.

Marcin vs. Cramer

Obviously, Jim Cramer and I disagree on the homebuilders. I had sold them into the "land bank" run, but repurchased them recently after their big decline.

However, our disagreement is more fundamental than that. He says to follow the stock-price action, and I say follow valuations and fundamentals. I have made an entire career out of buying stocks that are dropping big to cheap valuations, with good fundamentals.

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