Tuesday , September 22 2020
Home / Managerial Econ / Are we in a stock market bubble?

Are we in a stock market bubble?

Summary:
The graph above plots Prof Robert Shiller's cyclically adjusted price/earnings ratio or CAPE. Shiller is the bubbleologist who predicted the 1999 stock market bubble using a graph like the one above as well as the 2007 housing bubble.  The price/earnings ratio is a measure of the value of a stock, and we see that when it goes above 20, we generally see subsequent declines.  However, we have been above this value for the past decade.  DISCLAIMER:  If I really knew, I wouldn't be teaching school.  HT:  ZeroHedge.com

Topics:
[email protected] (Luke Froeb) considers the following as important:

This could be interesting, too:

[email protected] (Luke Froeb) writes Are we in a housing bubble?

[email protected] (Luke Froeb) writes Why is the Chinese yuan strengthening against the dollar?

[email protected] (Luke Froeb) writes Is the 10% dollar depreciation good or bad?

[email protected] (Luke Froeb) writes Why are Gold, Stocks, and Bonds appreciating?

Are we in a stock market bubble?
The graph above plots Prof Robert Shiller's cyclically adjusted price/earnings ratio or CAPE. Shiller is the bubbleologist who predicted the 1999 stock market bubble using a graph like the one above as well as the 2007 housing bubble.  The price/earnings ratio is a measure of the value of a stock, and we see that when it goes above 20, we generally see subsequent declines.  However, we have been above this value for the past decade.  

DISCLAIMER:  If I really knew, I wouldn't be teaching school.  

HT:  ZeroHedge.com

Leave a Reply

Your email address will not be published. Required fields are marked *