FYI: Robert J. Shiller has shown remarkable prescience over the years. In Irrational Exuberance, he successfully called the dot-com bubble. Less than 10 years later, in the run-up to the financial crisis, he issued similarly accurate warnings about the bloated housing market.
Of course, Shiller is known for more than just his forecasting abilities. The cyclically adjusted price earnings (CAPE) ratio, or the Shiller CAPE, has become a pillar of modern finance and grew out of research that earned him the 2013 Nobel Prize in economics.
It’s been almost two years since he last spoke with CFA Institute, and with talk of inverted yield curves, overvalued stock markets, and imminent recession, as well as his upcoming presentation on bubbles at next month’s Inside ETFs Conference, the present struck us as an opportune time to see what was on Shiller’s mind.
What follows is a lightly edited transcript of our discussion.
Regards,
Ted
https://blogs.cfainstitute.org/investor/2019/01/07/robert-j-shiller-on-bubbles-reflexivity-and-narrative-economics/
