Steve Hilton is enjoying the Phoenix Suns from the ground floor. Since they are destroying teams like never before, I think it’s more fun to talk about them. So does Steve.

I love our interview series because we are in control of the questions and I trust my instincts. There are plenty of places around the web to get buried in data about the homebuilding stocks, so you don’t need that from me. His outlook is what’s important. Here it is: He is bullish on the Southwest!

I don’t need to ask him about the stock. He can’t control it. In 1999, the stock was in the single digits and Meritage the COMPANY was CRANKING. The market could care less. At $90 and a fed funds rate of less than 1 percent, everybody wanted to own the stock. I am sure every ANAList had a strong buy. Price targets were being raised and no one would have listened if Steve had yelled fire.

What Meritage offers in hindsight is a classic trend following stock that always seemed too expensive on the climb to $99 and at today’s $44 baffles the value hunters by drifting lower. Here is the LIFETIME CHART. If you bought the stock in 2001 after when it hit it’s first all-time high in 10 years, you were about to catch a monster long. It had more than doubled from it’s lows just to get there. You likely would have thought that the move had been made. NOT!

Phoenix and the Southwest remain on fire despite the crack in homebuilder stocks. Humans chase the sun. That won’t change. BUT, if you are a long only trend follower (like me), the homebuilding stocks are broken. Lay all the data you want on bounces and bottoms and PE’s and charts and you come to the same conclusion. The stock would have to take out it’s all-time high in the 90’s before it would garner MY interest. That does not seem likely to me so…..back to the Sun’s :) .

Steve is a star in the Phoenix community, building a $3 billion (sales) homebuilder and being a partial owner of the Phoenix Suns. He is charitable and accessible. He is pretty no nonsense so I had no plans of fooling around. When in doubt, talk about the Sun’s.

Steve and I have a few things in common. We both have kids and own a home :) , we love the Suns and hate the Mavericks and if we could short Mark Cuban, we would :) . His home is nicer and his Sun’s tickets are better but those are details.

One thing I disagree with Steve – he is long real estate agents and I am short agents and long Zillow .

Enjoy the interview – great ending.