I have been ignoring all the forecasts for next year by pundits. One person I listen to is Shiller.
Robert Shiller was on CNBC last week discussing his outlook for the S&P500 in 2020. Shiller does not give estimates for 2011, instead focusing on long term returns.
For anyone unfamiliar with Shiller here is a brief bio:
Few macroeconomic prognosticators have been as correct as publicly at crucial moments as Yale’s Robert Shiller, whose first and second editions of the Irrational Exuberance
laid bare, with remarkable timing, the speculative bubbles forming first in the Internet-crazed stock market and next in residential real estate. Shiller is a professor of finance at Yale and the co-founder of investment firm MacroMarkets LLC. He recently teamed with Nobel laureate George Akerlof to write Animal Spirits: Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism 
.
Shiller states that while it is difficult to state accurately where the stock market will be in ten years, he uses his famous Shiller P/E ratio to give a rough estimate of future returns. Shiller expects to get to 1430 by 2020. Shiller thinks TTM and forward earnings are not very accurate since earnings are very volatile. I agree with Shiller and have discussed this in my monthly valuation series (_http://www.valuewalk.com/stock-market-valuations/stock-market-valuation-december-5th-2010/)
Shiller is also scared of the recent drop in housing prices, although he says seasonality might have been a factor in the low figures.
Below is the full video:
Robert Shiller was on CNBC last week discussing his outlook for the S&P500 in 2020. Shiller does not give estimates for 2011, instead focusing on long term returns.
For anyone unfamiliar with Shiller here is a brief bio:
Few macroeconomic prognosticators have been as correct as publicly at crucial moments as Yale’s Robert Shiller, whose first and second editions of the Irrational Exuberance
laid bare, with remarkable timing, the speculative bubbles forming first in the Internet-crazed stock market and next in residential real estate. Shiller is a professor of finance at Yale and the co-founder of investment firm MacroMarkets LLC. He recently teamed with Nobel laureate George Akerlof to write Animal Spirits: Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism .Shiller states that while it is difficult to state accurately where the stock market will be in ten years, he uses his famous Shiller P/E ratio to give a rough estimate of future returns. Shiller expects to get to 1430 by 2020. Shiller thinks TTM and forward earnings are not very accurate since earnings are very volatile. I agree with Shiller and have discussed this in my monthly valuation series (_http://www.valuewalk.com/stock-market-valuations/stock-market-valuation-december-5th-2010/)
Shiller is also scared of the recent drop in housing prices, although he says seasonality might have been a factor in the low figures.
Below is the full video:
