TOL down 7.5% on earnings today

TOL operates ALL over the country literally, so down TOL doesn't mean bad for Williamsburg. but do check the conference call if you are interested as these guys go through each regional mkt offering good detail and insight.

i've took a liking in these guys, TOL's CEO in particular for how honest he is. he might have drunk the kool aid indeed, but he always told it like he saw it. it's kind of weird to like the CEO of a company you are shorting in a sector that goes through the mother of all bubbles in a totally unchecked way (following horrible public policy that hoped for the bubble). nice guys, horrible public policy.

I'm well aware of their status as the top McMansion builder out there. They were way late to the NYC game, so they have plenty to lose. I didn't hear the call, but know that most of the loss was on land write downs.

I'm sure a Williamsburg write-down is going to chew through the $2B of cash that Toll is sitting on. http://blogs.wsj.com/developments/2009/12/04/bob-toll-struggles-with-a-cash-burden/

Hurry and line up for the fire sale!!!!

"I'm sure a Williamsburg write-down is going to chew through the $2B of cash that Toll is sitting on"

Huh? Any chance you could walk us through that one? The part where a write-down has an impact on cash, I mean.

Write-downs diminish the value of the the asset. An offsetting cash balance mitigates the impact of the write-down. Come with something productive next time instead of focusing on symantics.

"Come with something productive next time instead of focusing on symantics[sic]." I actually find commenting on sloppy posts by people who are unfamiliar with simple concepts to be productive. In this case the relevant concepts are "cash" and "non-cash". Write-downs are accounting entries that have no cash impact. They diminish the carrying value of the asset and the offsetting balance sheet impact is in the equity account, not cash. The cash before and after the write-down is the same.

Nice wikipedia quote.

sometimes its best to fess up on the mistake and move on.

sidelinesitter, do you follow homebuilders?

write-downs generally precede drops in transaction prices both in land and in specs sitting on the communities that they write-down. they do use incentives for a while (same as with landlords, they are very averse at allowing lower price transparency so that future profit margins are not hurt without need).

but when the write-downs finally come sure enough it's a recognition of a future transaction at a lower price than expected originally.