Nobel Winner: Market is Looking a Lot Like the 1930s

For those in the markets, the name Robert Shiller may not ring much of a bell. But for those who are into the macroeconomic picture and oook to some of the best economists in the business at trends in the world and American economy to make bets in the markets, Robert Shiller is a name to know.

In economics, anyway, he’s become a household name. Shiller, a professor at Yale University and the 2013 Nobel Laureate in economics, spoke to CNBC this week from the Davos economic conference and gave a fascinating take on the stock market and where it might be headed.

Looking at the history of the market and the recent trajectgory, Shiller projected that this stock market looks a lot like that existed in the majority of the ecade of the 1930s, as the country was trying to come back from the Great Depression.

“Let’s go back to 1982 when the stock market bottomed out,” Shiller said. ” People then had similar concerns (as now). They were worried about the national debt getting quite high, ¬†and hey were worried about inflation, believe it or not. and yet, the market zoomed up again until ’37. We’re on that sort of path now.”

Shiller does say that his analysis suggests that the market is just “middling” right now and may only outperform the inflation inde. But he also warns that while the market may not rise up much higher in the near-term from where it has been, he does caution that the possibility of a crash or significant correction is possible.

“I’m an optimistic person,” Shiller said. “I’m still in the market, but there is a potential for another collapse, definitely.”

Check out the full clip with Dr. Shiller below:

 

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