Whither the markets?

Southie · January 8, 2016, 5:59am

Re: Whither the markets?

This Saturday Jason Zweig article was his interview of Shiller. Which probably occurred earlier last week. With snp 500 close to 2000.

Shiller, wishy washy as always, stated the following. And I paraphrase
Well, you know , the CAPE ratio has been above average at 21 last 20 yrs. So compared to that, cape ratio of 26 is not very overvalued. Also, you know, who is to say history is not different this time. Maybe we are in a new time. With higher cape ratios. The market will go where investors bid it. Who is to say it can’t keep going higher. It certainly did after Dec 96. When cape ratio was higher. And if u got out, u missed the rally over next 3.5 years.

Of course he didn’t add that by 2009, all those gains had vanished. And the mkt was significantly lower than Dec 96.

This was October 15 2014. We rightly criticized Shiller for his wishy washiness. We called the mkt as overvalued. While the good Prof. Backed away from his own work.