A Catfish Recovery

You hear a lot of talk about predicting the bottom of the housing market and then looking for the consistent rise, but Scott Sambucci of Altos Research thinks otherwise:

“Think of the behavior of a catfish,” Sambucci said. “It will be a bottom-dweller, then it comes to the surface for a while and then heads back down. It’s bouncing around. It doesn’t have a clear pattern or distinct trend. It’s important to understand that moving forward, if you understand volatility, there are possibilities to make money on these inflection points.”

The whole article is worth reading. Some other high points:

“The notion that the housing market would hit bottom and head back up consistently is simply ignoring history,” Sambucci said. “There’s plenty of proof and plenty of historical data that shows continued volatility for a long period of time.”

. . .

“If the market starts to improve again, and bond prices approach par, it might be better to unload and wait for the market to come back down again. Just when you think it doesn’t seem it couldn’t be any worse as you see in the headlines, maybe it’s the time to buy again. Just take the ride up and down,” Sambucci said.