Mar

19

Robert Shiller, the oft-quoted Yale professor with a valuation approach that is bullish for a few hours once every decade (or so), appeared on my Bloomberg terminal late yesterday:

BN 03/18 *SHILLER SAYS STOCK MARKET IS 'OK INVESTMENT' STORY TO FOLLOW. –KARA WETZEL-0- Mar/18/2013 14:27 GMT

BN 03/18 *'I'M SAYING GO FOR IT,' SHILLER SAYS OF STOCK MARKET STORY TO FOLLOW.–KARA WETZEL-0- Mar/18/2013 14:27 GMT

BN 03/18 SHILLER SEES NO EVIDENCE OF A TURNING POINT IN HOUSING (Video)-0- Mar/18/2013 15:09 GMT

One ponders the definition of an "OK" investment from this celebrated professor? As to a "turning point":

turning point 1. a moment when the course of events is changed the turning point of his career

2. a point at which there is a change in direction or motion

3. (Mathematics) Maths a stationary point at which the first derivative of a function changes sign, so that typically its graph does not cross a horizontal tangent

4. (Mathematics & Measurements / Surveying) Surveying a point to which a foresight and a backsight are taken in levelling; change point

Victor Niederhoffer writes: 

One has had the displeasure of going one on one with the Professor while he rode his stationery bike. I got him to admit that his topsy turvy 10 year correlations were absurd as they show negative correlation with future price changes for previous years, but positive correlations for current years. I also pointed out the retrospective nature and part whole nature of his data from past years on which the basis of his work was done. He held up the possibility for a while that certain pareto processes or stochastic integrals had this tendency and then indicated that his work on p/e was not very significant and had not been updated. He did not consider me an important personage at that time, (I believe Lowenstein was there to add insult to injury), and at lunch which I paid for, he showed his contempt for me (probably justified) by directing all his attention and talk to the profs at the table. Subsequently I believe he realized that he had devoted quite a few pages of one of his bearish book showing that values were crazy because the dividend model would not have been as volatile as actual prices to some of my work on world events. To add further insult to injury Prof Lo had a similar experience with him when Lo was not as respected as today.


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