Re: What does Prof. Robert Shiller think about the market?
So for same set of earnings u get 22.5 and 17.5 as the p to e ratios. Makes no sense doc.
Re: What does Prof. Robert Shiller think about the market?
The earnings from the past get PENALIZED if inflation rate low. And REWARDED if inflation rate high. Come one doc.
Re: What does Prof. Robert Shiller think about the market?
Apparently, crude will be shipped overseas for refining. Laws didn't permit the big boys such as ExxonMobil to do this earlier. So due to no competition, the refinery stocks were bid up. And when the new law was passed, they paid the piper.
Well. You are not telling the whole story. The devil is in the details.
Re: What does Prof. Robert Shiller think about the market?
Only 2 companies have been allowed to ship unrefined crude. The names escape us. These r already producing light crude. With minimal processing the oil Cal be shipped sans refining. INSPITE of this the refiners got hit big time. Now imagine of laws of crude shipment were further modified to allow shipment of heavier oil. That's why. These stocks git pummelled. Anticipation of further relaxing of shipment laws.
Re: What does Prof. Robert Shiller think about the market?
Point being when this happens refiners stock willl probably tank more.
Ditto when interest rates spike up. Stocks will lose. Those who loaded up now will lose a lot. So rebalancing periodically is smart.
Re: What does Prof. Robert Shiller think about the market?
The name of the Citigroup analyst is not Charles Tobayavich. It’s Tobias Levkovich.
He states - this was abt a week ago - that stocks r undervalued based on the low interest rates. And that there is 91 pct probability mkt will be higher 1 year from now.
When asked if he is bullish over a 10 yr time frame, he responds - no one invests for 10 yrs anymore. The professionals have a 6 month to 1 yr time horizon.
If that is the case, this is a great time to be an individual investor.with a long time horizon. Let the professionals chase their own tail.
Re: What does Prof. Robert Shiller think about the market?
Today I read in finance.yahoo.com a comment from Tobias. After the 2 day drop, he states - and I paraphrase
Investors r fearful of the bull mkt and afraid to sit and and miss out on gains...However there is a larger group that is more worried that stocks are at very high levels. And r fearful of a huge drop.
Changing ur tune already, Mr. Levkovich. Ur time horizon appears to be one week.
Re: What does Prof. Robert Shiller think about the market?
Markets r abt 30 points higher than two months ago. Or 1.5 pct.
Prof Schiller in an interview with can be abt 2 days ago states cape ratio is 25. It has ti be > 26 since that was the ratio 2 months ago. And mkt is higher now.
Prof Schiller states stocks bonds and housing look expensive. But when challenged reverted to being wishy washy.
Re: What does Prof. Robert Shiller think about the market?
The interview said well because tech companies have higher margins they deserve higher p to e. I though that would mean higher price to sales. P to e probably more a function of growth rate. So wrong reason given. So argument was the stocks now deserve higher cape ratio.
Re: What does Prof. Robert Shiller think about the market?
To which shiller said - one can always make that case.
In support of the thesis he added - the CAPE ratio has remained above 20 in last 20 yrs.
Re: What does Prof. Robert Shiller think about the market?
I did some checking. The average historically is 20. Yes last 20 yrs most of time cape was above 20. In mid 96 cape at 25.5 same as now. Snp 500 at 630. Or about 6.5 pct cagr. Plus dividends. No bad. Not great.
In 2007 cape at 26. Snp500 1576. So 26 pct gain in 7 yrs. Abt 3 pct cagr. Pretty shabby.
Takeaway - the CAPE is a good predictor of long term returns.
With respect to 20 cape mkt appears 25 to 30 pct overvalued.
Rebalance is only free lunch.
Re: What does Prof. Robert Shiller think about the market?
Why Robert Shiller is calling this U.S. stock market
Here the Professor on the one hand calls mkt overextended. And on the other says it can keep going up. The CAPE is at 27. He picks.ONE instance in history when mkt climes to Cape of 44. And concludes mk5 could keeping going higher.
More of the wishy washiness.