Yale's Shiller: Public Faith in 'Overpriced' Stock Market At 15-Year Low
By FJ McGuire | Thursday, 02 Jul 2015
The U.S. stock market is one of the most expensive in the world and may be prone to bubbles, Nobel Prize-winning economist Robert Shiller warned.
Measuring valuations with his cyclically adjusted price-to-earnings index (which is price divided by 10-year average earnings) the Yale University professor told CNBC that his "CAPE index ... is higher than it's been, except 1929, 2000 and 2007," ominous years for the market.
"The public [also] worries that the stock market is overpriced," he said. "Their confidence in the level in the market is at its lowest since 2000."
He warned that bubbles can be formed "when people think it's time to get in, even though it's overpriced."
However, a MarketWatch survey of stock strategists and portfolio managers found that while no one believes stocks are cheap, too much is being made of high short-term valuations.
MarketWatch reported that just because stocks are pricey doesn’t mean they can’t get more expensive. It is just a matter of how much more, said Dan Greenhaus, chief strategist at BTIG.
“Further, valuations are high but given the level of interest and inflation rates, one could rationalize that level,” he told MarketWatch.
The American Association of Individual Investors' net percentage of bulls minus bears was at -12% on July 2, the second-lowest level since 2013 (the lowest being -13% on June 11). But, as Lee has pointed out before, extremes in this case usually mean the opposite: "Historically, the AAII survey is a contrarian indicator with a very good track record at the extremes," Lee wrote in a note last month. "For instance, since 1987, whenever the net bulls reading is this low, stocks have seen a subsequent six-month rally 100% of the time, with an average gain of 7%."
rominause: If only I could soup up my salary a bit! But no worries - I know guys who can do it for me. They technique in sports betting was a huge shackeaout for the market. Wanna see? Follow my link jkr.co/!
Apr 14, 2021 1:41:25 GMT -6
Susan George: Thank You for your support!
Dec 21, 2020 17:18:51 GMT -6
Tonja: I think you need to consult with a professional development team. Start by covering your idea and implementing its design. This should be a company with experience as northell.design
Nov 29, 2020 17:15:41 GMT -6
VasCos: Mobile cryptocurrency wallet is a mobile application that stores your cryptocurrencies and carries out your transactions. Learn more about cryptocurrency wallets at plark.io right now.
Nov 13, 2019 16:18:54 GMT -6
ConGM: Please direct me to the full article by Susan George. Or email to email@example.com.The provided link is broken. I'd like to read it in preperation for a course. Much appreciated.
Nov 13, 2017 15:19:23 GMT -6
ace comando: Well, it took me several days and a lot of code writing to sift through the millions of achieved pages on the Wayback Machine achieves. Was about to give up when a colleague gave me mining script to look at all archived pages whether displayed or not. And
Feb 24, 2017 19:44:10 GMT -6
unlawflcombatnt: I've now changed the colors on the board to something more readable. At least now readers can find the sign-in tab.
Jul 6, 2014 22:58:23 GMT -6
unlawflcombatnt: OldUser-the sign-in area is in the dark area immediately under the red section that says Economic Populist Forum. It's almost impossible to see, unless you know where to look. This was ProBoards idea, not mine.
Jun 12, 2014 11:52:53 GMT -6
OldUser: There's no link on here to sign on or login. Where'd it go?
May 29, 2014 8:44:44 GMT -6
jeffolie: One might short a bull ETF to gain the decay but this requires a margin position subject to changes imposed by the exchanges & brokers
Oct 26, 2013 13:26:07 GMT -6
jeffolie: Holding a stop loss in these algo dominated markets almost always means the algos will hit your stops
Oct 26, 2013 13:20:09 GMT -6
jeffolie: Even so, these leveraged ETFs do not create margin calls nor expiration dates thus allowing one to hold indefinitely
Oct 26, 2013 13:17:52 GMT -6
jeffolie: Yes, the ETF features fading/leveraged decay because the futures and/or options used decay plus the administrative costs rise the decay, declining value ... I accept this as a cost and feature of all ETFs that purchase futures/options to maintain price
Oct 26, 2013 13:15:38 GMT -6
mimzy: jeffolie ~ I've been reading/lurking you for a year or three now and was wondering if your could you explain how you overcome quantum fading/leveraged decay in your ETF short position of the DJIA?
Oct 25, 2013 20:46:26 GMT -6