Irrational Exuberance is not an easy read. It is not a particularly interesting read. It has three claims to fame. It was published first right before the dot com crash, and warned the stock...
Irrational Exuberance is not an easy read. It is not a particularly interesting read. It has three claims to fame.
It was revised two years before the housing market crash, and warned of the housing market bubble. It introduced the concept of the case-shiller index, which accurately tracks unimproved house price increases, and if memory serves correctly, it also used the concept of a price rent ratio, similar to a price earnings ratio for stock markets.
It was revised four years ago for the third time, and warned that everything was overvalued. Global stocks, international housing, even bonds.
Irrational Exuberance is not an easy read. It is not a particularly interesting read. It has three claims to fame.
It was published first right before the dot com crash, and warned the stock market was overvalued. It introduced the concept of a cyclically adjusted price/earnings ratio as a way to warn you if companies are overvalued vs their historical ten year earnings.
It was revised two years before the housing market crash, and warned of the housing market bubble. It introduced the concept of the case-shiller index, which accurately tracks unimproved house price increases, and if memory serves correctly, it also used the concept of a price rent ratio, similar to a price earnings ratio for stock markets.
It was revised four years ago for the third time, and warned that everything was overvalued. Global stocks, international housing, even bonds.