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Monday, July 6, 2015

Robert Schiller Says Buy Greek Stocks?!

     Give him credit for being counter-intuitive here. His theory of investing is buy low valuations and they don't come much lower than Greece right now.

    "While economist Robert Shiller finds American stocks to be expensive, he suggests that battered Greek equities may actually present a compelling opportunity for savvy investors."

    "The Nobel prize-winning Yale economist is famous for his valuation-based view of markets. In the long-run, low price-to-earnings ratios provide attractive long-term opportunities, and richly valued markets require caution, his work has shown."

    "Human psychology is what tends to get in the way and to create such opportunities, causing investors to become overly pessimistic at times when stocks are attractive, and far too optimistic in the midst of the bubbles, he has said."

    "When pressed on where the best value might be found now, Shiller quickly responded: "Greece!"

    "The economist went on to say that he's not rushing to invest too heavily in Greece. "Maybe I should. I think a little bit in Greece, maybe. One feels fearful, though. I feel fearful about that. It seems awfully edge-of-the-cliff right now, doesn't it?""

     http://www.cnbc.com/id/102811409

     This sounds more impressive unitl you realize that he made this case before the no vote yesterday. JP Morgan now sees Grexit as likely:

     "After the vote, JPMorgan's Europe economic research team concluded that "there is now a high likelihood of a Greek exit from the euro, and possibly under chaotic circumstances," although views on this matter are sharply divided."

     True, though the chaos has already started and is already a week old. 

  

     

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