TL;DR
Darren Wilson examines Berkshire Hathaway’s $8.5B acquisition of US home builder Taylor Morrison — new CEO Greg Abel’s first major deal — through the 18.6-year real estate cycle lens. Reviewing charts of the top 5 US home builders (D.R. Horton, Lennar, PulteGroup, NVR, Toll Brothers), all of which peaked between September–November 2024 and are now making lower highs, Wilson argues this acquisition will likely prove costly for Abel, as the cycle is in its late stage and these stocks typically peak before the overall market.
Key Points
- Berkshire Hathaway acquired Taylor Morrison for 8.5B including debt) at $72.50/share, a 24% premium — Greg Abel’s first major acquisition as CEO (took over Jan 2026)
- Top 5 US home builder charts all show the same pattern: decade highs in Sep–Nov 2024, followed by lower highs — a critical early indicator that the real estate cycle is approaching its end
- D.R. Horton (DHI): peaked September 2024, now sideways below that high
- Lennar (LEN): peaked September 2024, fallen hard, now below all three moving averages — weakest of the group
- PulteGroup (PHM): peaked October 2024, but in a stronger relative position than Lennar
- NVR: peaked October 2024, in a “really, really weak position”
- Toll Brothers (TOL): peaked November 2024 (last to top), showing a triple top pattern — Wilson maps this to Gann’s soybean campaign methodology
- Toll Brothers triple top → potential short campaign: Wilson draws a direct parallel to WD Gann’s 1941 soybean campaign, where Gann began a year-long bull campaign after a triple bottom. Wilson sees the inverse — a potential 12–15 month short campaign on Toll Brothers after three failed attempts to break to new highs
- Home builder stocks as leading indicator: In the 2006–2007 cycle, D.R. Horton peaked in 2005, well before the S&P 500 topped in October 2007. The same pattern is repeating now — home builders peaked in 2024 while the broader market continues to make highs
- US land prices appear to have peaked around February 2026 (though government data is incomplete due to shutdown); historically, the stock market tops ~17 months after the land peak
- North Node entered Aquarius on July 28, 2026 — astrologically, this 18.6-year cycle event historically coincides with US depressions/recessions
- Fed Chair Kevin Warsh speaking the next day — outcome uncertain but significant for markets
Notable Quotes
“I think that this will prove to be a costly error for Greg Abel… paying $200 a share when you could probably buy this company for 30 bucks a share about 12 months from now.” — Darren Wilson
“In the real estate cycle, one of the indicators that we use here at PSE is the performance of the top home developers/builders. We look for when they put in their decade high. And then, we watch for what history suggests — if that is the final high of the cycle, they’ll start putting in a number of lower tops, which indicate the market is pricing in lower earnings as we go forward.” — Darren Wilson
“When US land prices peak, then generally, the general stock markets top out 17 months after that. Land peaks first then the stock market.” — Darren Wilson
Watchlist Changes
None explicit — but Wilson flags Toll Brothers (TOL) as a potential short campaign candidate over the next 12–15 months based on the triple top pattern.
Emma’s Analysis
This postcard reinforces the home builder leading indicator thesis that PSE has been tracking throughout 2026. The pattern is remarkably consistent with the 2005–2007 cycle: home builder stocks peaked ~2 years before the broader market top. Darren’s chart review of all five major builders showing lower highs from their 2024 peaks corroborates Phil Anderson’s call that US land prices peaked around February 2026 (see 2026-07-07-orlando-meet-greet-2026-recordings and real-estate-cycle-peak).
The Berkshire/Taylor Morrison acquisition is a fascinating late-cycle data point. As Darren notes, Buffett and Munger rarely got deals wrong on a medium-to-long-term basis, but this was Greg Abel’s first major deal — raising the question of whether the new CEO has the same cyclical awareness. An $8.5B acquisition of a home builder at this stage of the cycle is precisely the kind of “smart money making a dumb move” that historically occurs near peaks — reminiscent of the timing of other late-cycle acquisitions.
The Toll Brothers triple top observation and its mapping to Gann’s soybean campaign methodology is notable. Wilson is essentially flagging a Gann-style short setup: three failed attempts at new highs → trend reversal. This connects to gann-time-counts and the broader Gann framework of using repeated failure at a level as a signal.
The 17-month lag from land peak to stock market peak is a critical PSE framework. If land peaked in February 2026, this would suggest a stock market peak around July–August 2027 — though Anderson has noted the lag is variable (1–3 years historically). The North Node entering Aquarius on July 28, 2026 adds an astrological confirmation marker that PSE tracks alongside the cycle.
Cross-references: real-estate-cycle-peak, 18-6-year-real-estate-cycle, gann-time-counts, land-speculation, 2026-07-28-gann-24-commodities-breakout-gsg-dba-drs