Sam Zell is a smart smart dude. I recently came across an article he wrote in 1986, during a major real estate downturn. Many of the concerns he pointed out over 23 years ago are the same issues we’re dealing with in today’s recession.
Here’s a snippet, but I recommend you read the entire article embedded below:
“Unfortunately, the size of the losses will ultimately bring the real estate business back to reality. These losses will instill the discipline that the players have been unable to implement. Savants will look back on this period and equate it to the historic excesses of the past. The tulip craze in Holland in the 17th century, the railroad boom of the 19th century, and the Florida land boom of the 1920’s all reflect the frenzies of those eras when the participants lost sight of the underlying fundamentals. The moral of the story is: when they stop eating the sardines and only focus on trading them, the stench will become overpowering.”
