Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
CULater
Posts: 461
Joined: Sun Nov 13, 2016 10:59 am

Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Post by CULater » Tue Nov 14, 2017 4:05 pm

In Shiller's way of thinking, stock bear markets are likely occur when (1) the market is overpriced, and (2) investors think it is overpriced and are poised for the exit. He feels these conditions are starting to unfold, but he says he's not yet ready to pull the plug:
"I'm concerned. It's not just the one-year confidence, but it's also the valuation confidence" said Shiller on CNBC's "Halftime Report" on Tuesday. "Most people are worried. It's the high price to earnings ratio — or I'd use the high CAPE ratio — so you have a weakening of optimism and you have a concern about overpricing."
https://www.cnbc.com/2017/11/14/robert- ... ears.html
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

harvestbook
Posts: 316
Joined: Sat Mar 18, 2017 7:12 pm

Re: Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Post by harvestbook » Tue Nov 14, 2017 5:24 pm

He is rambling and throwing lots of stuff at the wall, from investor sentiment to politically-driven market moves to his pet math formula, yet he has a rare moment of clarity and honesty when he admits he "could be wrong."
I'm not smart enough to know, and I can't afford to guess.

GLState
Posts: 82
Joined: Wed Feb 15, 2017 10:38 am

Re: Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Post by GLState » Tue Nov 14, 2017 6:35 pm

The Conference Board Consumer Confidence improved to "it's highest level in almost 17 years" in October.
https://www.conference-board.org/data/c ... idence.cfm

The University of Michigan doesn't indicate any drastic changes in consumer sentiment in early November.
http://www.sca.isr.umich.edu/

User avatar
oldcomputerguy
Posts: 1989
Joined: Sun Nov 22, 2015 6:50 am
Location: In the middle of five acres of woods

Re: Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Post by oldcomputerguy » Tue Nov 14, 2017 6:39 pm

GLState wrote:
Tue Nov 14, 2017 6:35 pm
The Conference Board Consumer Confidence improved to "it's highest level in almost 17 years" in October.
https://www.conference-board.org/data/c ... idence.cfm

The University of Michigan doesn't indicate any drastic changes in consumer sentiment in early November.
http://www.sca.isr.umich.edu/
Is Shiller referring to consumer confidence or investor confidence? I don't think they're the same thing.
Anybody know why there's a 20-pound frozen turkey up in the light grid?

CULater
Posts: 461
Joined: Sun Nov 13, 2016 10:59 am

Re: Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Post by CULater » Tue Nov 14, 2017 9:26 pm

Let's see now... over 16 years ago, something happened. Trying to remember.... Oh, now it's coming back... There was like a mega market crash around that time wasn't there? I don't think that could happen again. Oh wait, it did happen again in 2008. But that couldn't happen again...
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

User avatar
randomizer
Posts: 621
Joined: Sun Jul 06, 2014 3:46 pm

Re: Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Post by randomizer » Wed Nov 15, 2017 12:31 am

Shiller sure is getting a bunch of press recently.

User avatar
Pajamas
Posts: 2780
Joined: Sun Jun 03, 2012 6:32 pm

Re: Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Post by Pajamas » Wed Nov 15, 2017 12:43 am

According to the article, he is referring to "individual investor confidence".

As it happens, institutional investor confidence is currently higher than individual investor confidence and individual investor confidence is often considered to be a contrarian indicator.

Make of it what you will!

goblue100
Posts: 340
Joined: Sun Dec 01, 2013 10:31 am

Re: Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Post by goblue100 » Wed Nov 15, 2017 9:43 am

CULater wrote:
Tue Nov 14, 2017 9:26 pm
Let's see now... over 16 years ago, something happened. Trying to remember.... Oh, now it's coming back... There was like a mega market crash around that time wasn't there? I don't think that could happen again. Oh wait, it did happen again in 2008. But that couldn't happen again...
Of course it can (and will) happen again. And someone will be lucky to express negative sentiment right before it happens, and will be proclaimed a great genius. Why do you think they have predicted 20 of the last 2 crashes? (Stolen from someone on this site. I don't remember who.)

The question is, is this actionable? Are you changing your AA based on Shillers "concern"?
Some people are immune to good advice. - Saul Goodman

GLState
Posts: 82
Joined: Wed Feb 15, 2017 10:38 am

Re: Shiller is 'concerned' after lowest sentiment data readings in over 16 years

Post by GLState » Wed Nov 15, 2017 2:13 pm

oldcomputerguy wrote:
Tue Nov 14, 2017 6:39 pm
GLState wrote:
Tue Nov 14, 2017 6:35 pm
The Conference Board Consumer Confidence improved to "it's highest level in almost 17 years" in October.
https://www.conference-board.org/data/c ... idence.cfm

The University of Michigan doesn't indicate any drastic changes in consumer sentiment in early November.
http://www.sca.isr.umich.edu/
Is Shiller referring to consumer confidence or investor confidence? I don't think they're the same thing.

Mr. Shiller is referring to Yale's One Year Stock Market Confidence Indices as sentiment. He has a link in his online data repository... http://www.econ.yale.edu/~shiller/data.htm
.... which will lead to this data http://som.yale.edu/faculty-research/ce ... ce-indices

Post Reply