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Beware of Nobel Laureates Crying Wolf

Beware of Nobel Laureates Crying Wolf

May 01, 2017
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Nobel laureate Robert Shiller warned in the NY Times last month that we should be cautious about stock prices ("Caution Signals Are Blinking For The Trump Bull Market").  I'm sure more than one reader took his advice to heart and avoided investing their monthly 401k contribution (stocks were up in April across the board).  I wonder how persuasive this article would have seemed if the NY Times reminded its readers that Shiller penned basically the same piece with a slightly different set of economic/market concerns in August of 2015 ("Rising Anxiety That Stocks Are Overpriced").  Or that in 2010, Shiller was warning of a double-dip recession ("Fear of a Double Dip Could Cause One").  Returns on a diversified stock index portfolio have been +118.6% since June 2010 (+12.1% per year) and +24.6% since September 2015 (+14.9% per year).  At some point Shiller will publish an article that will correspond with a stock market decline and the financial media will rush to congratulate him for his remarkable foresight.  

Mark my words.


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