Nobel Laureate: No Fear Of US Stock Market Crash Yet To Start Selling Short

Despite the recent sharp adjustment in US stocks, Robert Schiller, the winner of the Nobel prize in economics, has been giving a reassurance to investors at a critical moment. He has recently disclosed that he has not started selling short shares, nor has he sold any ups and downs. He believes that the market position is not important, the key lies in market expectations, once the market has formed a consensus of economic growth stagnation, then the market turning point will come.

Udland wrote that Buffett, the stock god, came in to buy stocks while the market crashed in October 1st. Schiller, the academic representative of the Nobel laureate, did not change. He did not start selling stocks because of the market crash.

According to an interview with Jason Zweig, he did not sell stocks in the past few weeks when the market was still rising.

Last week, when the index fell more than 300 points, Schiller told Zweig that the bull market has been running for more than 5 years, and the position is really high, but I still have no idea of throwing stocks.

He cautioned investors not to go through specific points. Market measurement Instead, we need to focus on changes in market expectations. Once the market has formed the consensus of economic stagnation, the bull market will come to an end.

Shiller built its own CAPE index (cyclical adjusted P / E) to measure the valuation level of the market. This valuation method used the average profit of 10 years to replace the profit of the past year in the ordinary P / E ratio, smoothing the impact of the business cycle on valuation, making the valuation more accurate.

He told Zweig that although the CAPE index is at an ultra-high level than in history, investors can not sell short shares, and should pay more attention to whether the current market situation has changed compared with that of history.

As of last Friday's closing, CAPE index 25, far above the long-term historical average of 16.

At the end of last month, Schiller said in an interview with CNBC that the growing anxiety and anxiety of investors is the main reason to support the continuous rise of the market.

Schiller said, according to his questionnaire survey, stock prices have been rising, and retail investors are not crazy. Instead, they are restless. Many retail investors have chosen to rush back.

　　 Schiller It may be thought that when people are in a state of anxiety, share prices should fall instead of rising. Geopolitical unrest, uneven distribution of income, and nowhere to look for ideal careers, these problems constitute the source of anxiety.

But it is precisely because of these anxieties that people want to save more money. It is precisely because of the economic downturn that investors continue to push up share prices, so the stock market has become the biggest beneficiary of public anxiety.

Udland pointed out that at the beginning of July, Schiller had warned that the US stocks were overvalued because of the high CAPE index. Investors should be alert to the risk of falling down. After months, they kept throwing up empty talk. Now this big bear is out of the ordinary, and is holding up the stock market at the time of a big drop.

Schiller also mentioned the bond market, the bond yields in the global market are close to historical lows, and the bond market will be the four argument for the next financial bubble.

He pointed out that when the price change caused the market to anticipate that the price will keep rising and never fall down, the bubble formed. However, the atmosphere of the bond market is now on the opposite side of the rising expectations. The rise in the bond market is driven by the market's potential worries about the prospects of global economic growth, which is not a bubble.