Sam Zell we are on the verge of seeing a bottom in housing prices. Speaking at a convention in Las Vegas, Mr. Zell told the audience:
“Housing market stability will appear sometime this summer. I can’t tell you if it’s June 29 or August 1.”
“That will be very positive for retail sales,” Zell said. “I think the days of extraordinary expenditures without regard to cost to keep up with the Joneses is less likely a case going forward. I envision a slow unclogging of the worldwide financial system, which ultimately will be positive for all of us.”
“This is a worldwide recession and not a U.S. recession,” said Zell.
“But the U.S. will recover and recover first around the world because we have a culture and we have an environment where we face up to reality quickly and effectively as opposed to many other counties in the world which create zombie environments because they are not able to face up to reality,” he added.
I’m not sure which part of this commentary I have a bigger issue with: Zell’s idea that the U.S. has not created zombie banks, his idea that the U.S. will rebound first (considering the fact that China has already emerged from recession before the U.S.) or his idea that housing will bottom in the next 3 months despite a 18.6% year over year decline in the Case Shiller Housing figures. It might be safe to assume that Mr. Zell has his investment thesis a bit off kilter or he is just talking his extremely large commercial real estate book.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.