@@NoRegertsHere Fama's point was that your chances of guessing a stock's current price are not better than the chances of the market itself. It has nothing to do with an assumption that everybody will make the same decision given the same information - if that was simply the case, he wouldn't have won the nobel prize.
@@k4ir0s the assertion was that he disagrees with what was being said on the news interview. You can beat the market, but you don’t do it by picking random stocks. You do it by reading their financial statements etc. A different method. Not randomly picking.
Great discussion between two greats. That girl should recognize when something is over her head and just let them talk to one another. Shiller gets to the heart of the problem with EMH dogma - it assigns wisdom to crowds, but denies they are capable of madness.
Interpretation: Markets are both efficient and inefficient. The big picture (news) or longterm is efficient. The day trader picture (emotion) or very short term is inefficient. Analogous to the distant bend in the road becomes straighter closer up. Markets are efficient in the distance and inefficient close up. Chaotic close, Ordered far away. “No thing under the sun is new.” (Ecclesiastes 1:9).
Both are right - the markets are both perfect and imperfect. What I mean is the market price today is correct based on all the collective knowledge of all the investors in a given stock. If someone comes along with more information than the crowd then they can beat the market. So to the informed, the markets are imperfect and to the uninformed man in the street, the markets are perfectly efficient.
So tired of Stephanie Ruhle... I mean let people talk, especially when it comes to Asness and Shiller. You don't need to try sounding smart, you don't have to prove anything by keep trying to lead the talk, because you do NOT have the expertise in the topic.
_"....keep trying to lead the talk"?!_ YEAH! Imagine that!... A *HOST* of a *program* trying to lead *_guests_* through a *segment on a show.* Oh, wait.... *duh*
This jokes were not funny...I keep asking, "what is funny?" Please give us a break and allow the Noble Prize winner to speak. The thing the interviewer fails to recognize, Highly efficient and effective brain power does not accept heavy handed treatment. I think back to my college days, and once in a while some jerk would try to talk above the professor or other classmates. Within in a few moments, he was asked to leave the room and cool off! How come these interviewers have a license to interrogate, rather than lead a conversation? Just let the professor say what he came to say. What's the point of arguing with the guy???
The value style doesn't beat the market on a risk adjusted basis so it doesn't violate the effecient market hypothesis. The value premium is compensation for risk.
There are a lot of stuff wrong with what you are saying there. First and foremost, value generally has lower standard deviation ane lower beta than 'growth' stocks. So if anything, value will look better on a risk adjusted basis than it does without it. Secondly, many people who oppose EMH also oppose the notion that standard deviation is any meaningful measure of risk, so the argument is rather meaningless. And finally, if risky assets can be relied upon to outperform then they aren't exactly risky, so there is a fundamental misnomer in the idea that you can reliably take on risk to gain expected return.
@@theWebWizrd You have some reasonable points but you miss the fact that Value have other types of risk associated with it, besides standard deviation. Career risk is a big one. Hypothetically, let's say I can construct a portfolio that is 100% guaranteed to outperform on a ten or twenty year horizon but is also guaranteed to underperform 90% of months then I would like to invest in this and probably so would you. But, professional money managers they cannot invest in this. They will get fired if they do because they are evaluated on a quarterly basis. This is called career risk and it's a very real risk associated with value. This risk is not diversifiable and will stick around forever. The portfolio I described is a pretty good model for value. It always wins in the long run and it always sucks in the short run. Proffesionals cannot invest in stuff like this. They get fired. There are other similar risks associated with value that are also not diversifiable and are also not captured by STD but I will leave it here to avoid writing a book.
@@theWebWizrd such great definitions, and language I hope with this I can make more money... But the academics are academics, they ain't businessmen...
I don’t take the time to study all of this. I have others opinions and go with it. My Dads picks, (not a stock broker) that I asked for has almost 20% profit since the beg. of the year. He doesn’t like to give advice on it, and said to play it safe years ago. Then I asked a Chinese lady at work figuring they’re into it. I took her advice too which uplifted my rate of return, but not nearly as much. I didn’t want to get in when it’s so high, but you can buy lifecycle target funds that are beyond your retirement date for more aggression and the price is lower, so that sold me. Most of my savings got put into homes.
Not sure about homes right now, who knows how a recession will affect prices. Coca-Cola and Nestle will probably be better recession hedges than housing, unless the housing is in the DC market. I'm in the Warren Buffett school of "buy and hold for decades what you can understand", and through that lens, look more into data analysis and monetization, a very fledgling industry whose potential really isn't baked into the price. I'd be long Google, Salesforce, Amazon, Microsoft, Adobe, Facebook, and IBM. Here's another industry that's a better bet than homes. If Google were to offer something that is cleaner, quieter, safer, more convenient, cheaper, and better than owning a car, and it had Android Auto built in, how do you think that people would accept it? Look into Tony Seba's research on self-driving electric cars, and you'll a) be reticent to get a big car loan; b) know that Google stock is massively undervalued. You can also watch some of Seba's presentations on TH-cam; his Freightwaves presentation is my go-to for beginners. Other winners on self-driving car technology: 5G cell carriers like Verizon and AT&T, and self-driving car chip makers like nVidia. GM and Tesla are two carmakers at forefront of self-driving and EV's, yet I don't have confidence both will succeed (but I think one of them will beyond the market's expectations), so it's smart to bet long on a dollar-for-dollar hedge.
Having He and many others in "The Back Seat of my Limo" for over 30 yrs, chauffeuring them to/from the Airport from Downtown Hotels, having them for over the average of 45 min ea. time and at least 2-3x a yr x 30 yrs? You do the math..Value Stocks and some Certain Bond Funds and only Extra 4 into Leveraging at certain times We Leveraged Long Tresuries from Mid 08' thru 3/09' and became Rich.. Took oour $ and after we sold our Real Estate back in 05' & 06' for prices we could not refuse, then Trippled it btwn 08' early 09' and have been Diversified ever since only having ot Keep up with Inflation and make out 5% yr for ourselves..
If value stocks beat the market the market through arbitrage would correctly price said group of securities. Why would the market loss money on value stocks?
The market doesn't lose money on anything. It's the market, it's on both sides of all trades. But you can do better than the market average return because other people will forfeit a market average return by trying to beat the market as a whole.
What is this? There is such a mismatch between the shallowness of the questions they're asking and the depth of the research they're asking them about. This hurts my brain.
Proof sexism is alive: idiots in the comments complaining that the female host talked at all (providing actually arguments for Shiller to clarify). You do know she talked like 5% of the time if that, right?
Once everyone is hip to the fact that value stocks have outperformed the market, then it will no longer outperform the market (everyone will allocate there). Since 2002 the total stock market has outperformed small value caps. So maybe the premium is already gone?
Behaviorists seem to use hindsight examples to demonstrate market inefficiencies. Fama would ask, "Okay. I'll accept that, but how do I use that knowledge to predict anomalies?". Behaviorist can't really provide a helpful answer here.
Yes, they can. In this very video Shiller points to fads. So look at people predicting a downfall in hyped things like Bitcoin, NFTs, Tesla, NVIDIA and other AI stocks, or even just people predicting that the US stock marked will lag the next 5-10 years due to high index P/E. These are all predictions that are impossible to make with any degree of certainty - zero- under EMH.
Of course you can beat the market, markets are the average of all equities in the market. So the top equities in a market will by definition beat the market, add some reinvested dividends and you will beat the market. Learn how to find disruptors and you will destroy markets, I've beat the tsx and s&p by over 100% 3 years in a row and I'm not a professional. But that doesn't mean a market is efficient or inefficient. If you look at options pricing, markets are efficient. If you look at consistency, they are less efficient.
Man, I never, ever learned anything from Robert Shiller; he always answers questions with some ambiguous non-sense. it's odd that someone who is supposed to be such a brilliant economist won't be able to teach you anything.
Investment Drone exactly. I think he doesn’t know what he’s talking about. Just buy your cheapo index fund and do nothing is way better than his scammy bs.
If he won the Nobel prize he must have some important things to say, whether you agree with them or not. Those interviewers were terrible, wisercracking and laughing. Very low class.
"... optimal expectations of future craziness." I think I've found my new motto.
Mr [ Dr? ]Robert Schiller smiles and argues very confidently,keeping his cool.I think what he says makes perfect sense.
its professor actually. he works at yale
People in station are taking too much forgetting the fact that they have nobel prize winner on the other side
People in the station talk too much!!! It even worries my pets.
spot on analysis.
Nobel prize winner assumes that given the same information, everybody will make the same decision.
@@NoRegertsHere Fama's point was that your chances of guessing a stock's current price are not better than the chances of the market itself. It has nothing to do with an assumption that everybody will make the same decision given the same information - if that was simply the case, he wouldn't have won the nobel prize.
@@k4ir0s the assertion was that he disagrees with what was being said on the news interview.
You can beat the market, but you don’t do it by picking random stocks. You do it by reading their financial statements etc. A different method. Not randomly picking.
Great discussion between two greats. That girl should recognize when something is over her head and just let them talk to one another. Shiller gets to the heart of the problem with EMH dogma - it assigns wisdom to crowds, but denies they are capable of madness.
Before Covid if you went to Walmart on Christmas Day at 5 am to witness the mob run amok, you certainly saw the madness of crowds.
Interpretation: Markets are both efficient and inefficient. The big picture (news) or longterm is efficient. The day trader picture (emotion) or very short term is inefficient.
Analogous to the distant bend in the road becomes straighter closer up. Markets are efficient in the distance and inefficient close up. Chaotic close, Ordered far away. “No thing under the sun is new.” (Ecclesiastes 1:9).
If they are both, then they are neither, then they are inefficient, no matter the horizon :)
why did this women consistently interrupt Shiller's talk? annoying
Both are right - the markets are both perfect and imperfect. What I mean is the market price today is correct based on all the collective knowledge of all the investors in a given stock. If someone comes along with more information than the crowd then they can beat the market. So to the informed, the markets are imperfect and to the uninformed man in the street, the markets are perfectly efficient.
Pretty much sums it up.
Let him talk and don’t interrupt!!!!!!!!
Brilliant paradox at 6:10
So tired of Stephanie Ruhle... I mean let people talk, especially when it comes to Asness and Shiller. You don't need to try sounding smart, you don't have to prove anything by keep trying to lead the talk, because you do NOT have the expertise in the topic.
Exactly, for any interviewer, what about? Less is more? I'm struggling to retrieve information the Nobel Prize winner is saying. It was difficult.
_"....keep trying to lead the talk"?!_ YEAH! Imagine that!... A *HOST* of a *program* trying to lead *_guests_* through a *segment on a show.*
Oh, wait.... *duh*
That happens everywhere, all the time. People pretending to be smart.
That dude needs to stop cracking jokes, it is so so awkward.
the awkwardness is funny
yup i agree, not when ur discussing such things.
Especially when he isn't funny and has poor delivery.
True that
This jokes were not funny...I keep asking, "what is funny?" Please give us a break and allow the Noble Prize winner to speak. The thing the interviewer fails to recognize, Highly efficient and effective brain power does not accept heavy handed treatment. I think back to my college days, and once in a while some jerk would try to talk above the professor or other classmates. Within in a few moments, he was asked to leave the room and cool off! How come these interviewers have a license to interrogate, rather than lead a conversation? Just let the professor say what he came to say. What's the point of arguing with the guy???
The value style doesn't beat the market on a risk adjusted basis so it doesn't violate the effecient market hypothesis. The value premium is compensation for risk.
There are a lot of stuff wrong with what you are saying there. First and foremost, value generally has lower standard deviation ane lower beta than 'growth' stocks. So if anything, value will look better on a risk adjusted basis than it does without it. Secondly, many people who oppose EMH also oppose the notion that standard deviation is any meaningful measure of risk, so the argument is rather meaningless. And finally, if risky assets can be relied upon to outperform then they aren't exactly risky, so there is a fundamental misnomer in the idea that you can reliably take on risk to gain expected return.
@@theWebWizrd You have some reasonable points but you miss the fact that Value have other types of risk associated with it, besides standard deviation. Career risk is a big one.
Hypothetically, let's say I can construct a portfolio that is 100% guaranteed to outperform on a ten or twenty year horizon but is also guaranteed to underperform 90% of months then I would like to invest in this and probably so would you. But, professional money managers they cannot invest in this. They will get fired if they do because they are evaluated on a quarterly basis. This is called career risk and it's a very real risk associated with value. This risk is not diversifiable and will stick around forever.
The portfolio I described is a pretty good model for value. It always wins in the long run and it always sucks in the short run. Proffesionals cannot invest in stuff like this. They get fired. There are other similar risks associated with value that are also not diversifiable and are also not captured by STD but I will leave it here to avoid writing a book.
@@theWebWizrd such great definitions, and language I hope with this I can make more money... But the academics are academics, they ain't businessmen...
Fama believes markets are perfect, they aren't perfect they are just the best we have got.
can somebody shorten it for me, what was his advice how to beat market?
Play Girls the closest to advice was "buy value stocks"
Dislike because these two people did not let the guess talk
Thank you Jason
What is he ( Robert Shiller) invested in?
10% oil
I don’t take the time to study all of this. I have others opinions and go with it. My Dads picks, (not a stock broker) that I asked for has almost 20% profit since the beg. of the year. He doesn’t like to give advice on it, and said to play it safe years ago. Then I asked a Chinese lady at work figuring they’re into it. I took her advice too which uplifted my rate of return, but not nearly as much. I didn’t want to get in when it’s so high, but you can buy lifecycle target funds that are beyond your retirement date for more aggression and the price is lower, so that sold me. Most of my savings got put into homes.
Not sure about homes right now, who knows how a recession will affect prices. Coca-Cola and Nestle will probably be better recession hedges than housing, unless the housing is in the DC market. I'm in the Warren Buffett school of "buy and hold for decades what you can understand", and through that lens, look more into data analysis and monetization, a very fledgling industry whose potential really isn't baked into the price. I'd be long Google, Salesforce, Amazon, Microsoft, Adobe, Facebook, and IBM.
Here's another industry that's a better bet than homes. If Google were to offer something that is cleaner, quieter, safer, more convenient, cheaper, and better than owning a car, and it had Android Auto built in, how do you think that people would accept it? Look into Tony Seba's research on self-driving electric cars, and you'll a) be reticent to get a big car loan; b) know that Google stock is massively undervalued. You can also watch some of Seba's presentations on TH-cam; his Freightwaves presentation is my go-to for beginners. Other winners on self-driving car technology: 5G cell carriers like Verizon and AT&T, and self-driving car chip makers like nVidia. GM and Tesla are two carmakers at forefront of self-driving and EV's, yet I don't have confidence both will succeed (but I think one of them will beyond the market's expectations), so it's smart to bet long on a dollar-for-dollar hedge.
No real world financial market is completely efficient!
Great video bro
If this guy did ICO reviews with the name ''professor shiller'' man that would be hillarious
Jesus let the man speak
Markets are not efficient because people are not rational. That is the single biggest indictment of the entire MPT framework.
Nice talk.
Having He and many others in "The Back Seat of my Limo" for over 30 yrs, chauffeuring them to/from the Airport from Downtown Hotels, having them for over the average of 45 min ea. time and at least 2-3x a yr x 30 yrs? You do the math..Value Stocks and some Certain Bond Funds and only Extra 4 into Leveraging at certain times We Leveraged Long Tresuries from Mid 08' thru 3/09' and became Rich.. Took oour $ and after we sold our Real Estate back in 05' & 06' for prices we could not refuse, then Trippled it btwn 08' early 09' and have been Diversified ever since only having ot Keep up with Inflation and make out 5% yr for ourselves..
Cochrane Will be the next Nobel prize.
Just what's your title s sumup Mista
It is not OK when the interviewer speaks more than the guest (Schiller).
Easy? Yeh right. Possible yes. Easy no.
I know war theory and phil
Geography
Loads of things
I can beat it easily
If value stocks beat the market the market through arbitrage would correctly price said group of securities.
Why would the market loss money on value stocks?
If markets are efficient (which I don't think they are) risk would be highly correlated with return.
beck john Nope, not perfectly. Even Fama admits this. Look up the 5 factors.
The market doesn't lose money on anything. It's the market, it's on both sides of all trades.
But you can do better than the market average return because other people will forfeit a market average return by trying to beat the market as a whole.
Mostly admire Shiller but cannot agree that one should be 'short' the industry you work in.
I think he meant if the industry went to the pits causing you to get laid off...
yeah - the guy on the left is not even in the same league as Robert Shiller.
Total market etf + Small cap value etf + Global Value but what % of each!!!
I don't get the shrimp joke
I think she said Bob Shiller?
great
What is this? There is such a mismatch between the shallowness of the questions they're asking and the depth of the research they're asking them about. This hurts my brain.
Honestly this was frustrating to watch. Let the man speak.
Proof sexism is alive: idiots in the comments complaining that the female host talked at all (providing actually arguments for Shiller to clarify). You do know she talked like 5% of the time if that, right?
🧡💛💚💙 This guy is hilarious. Would love to hear his jokes @ dinner 🧡💛💚💙
Such a shame to ruin such a promising interview with incompetent hosts. Had to stop watching due to cringing too hard at both Agness and Ruhle.
Easy? BS it's easy.
you can't beat the market. the market means the long term s and p 500. buy index funds. vanguard world index fund.
Once everyone is hip to the fact that value stocks have outperformed the market, then it will no longer outperform the market (everyone will allocate there).
Since 2002 the total stock market has outperformed small value caps. So maybe the premium is already gone?
Let Bob answer…ok?
Of course psychology plays a huge role in markets. Otherwise banks and hedge funds wouldn’t be willing to pay NLP experts.
Could you elaborate?
If only Cliff could suspend the aha, um, and you know. Filler words are so distracting and dummy down the message.
the bald guy is so terribly not funny and tries to be like the nobel prize winning shiller, which he just isnt
the bald guy has a firm worth billions, think he can give his point of view.
Solid God but Shiller is way ahead of that guy.
Solid God Uh, Asness is brilliant and honest here, and one of a handful of people capable of having this discussion.
Addressing him the bald guy just shows how much you know
That's Cliff Asness. Kinda in over your head here, huh?
Behaviorists seem to use hindsight examples to demonstrate market inefficiencies. Fama would ask, "Okay. I'll accept that, but how do I use that knowledge to predict anomalies?". Behaviorist can't really provide a helpful answer here.
Yes, they can. In this very video Shiller points to fads. So look at people predicting a downfall in hyped things like Bitcoin, NFTs, Tesla, NVIDIA and other AI stocks, or even just people predicting that the US stock marked will lag the next 5-10 years due to high index P/E. These are all predictions that are impossible to make with any degree of certainty - zero- under EMH.
This guy's as funny as cancer.
Schiller need to stop lying and he’s losing credibility quick
Lying? how?
Thumbs down for constant interruptions.
@3:34 Quiet, honey; a man is talking.
Of course you can beat the market, markets are the average of all equities in the market. So the top equities in a market will by definition beat the market, add some reinvested dividends and you will beat the market. Learn how to find disruptors and you will destroy markets, I've beat the tsx and s&p by over 100% 3 years in a row and I'm not a professional. But that doesn't mean a market is efficient or inefficient. If you look at options pricing, markets are efficient. If you look at consistency, they are less efficient.
just show me the money
Man, I never, ever learned anything from Robert Shiller; he always answers questions with some ambiguous non-sense. it's odd that someone who is supposed to be such a brilliant economist won't be able to teach you anything.
Investment Drone exactly. I think he doesn’t know what he’s talking about. Just buy your cheapo index fund and do nothing is way better than his scammy bs.
Long on shrimp?
why would own world stock? his head is too big he can handle one stock.
heres a way to beat the market 5 fold, swing trading.
Obama or Kamala Harris will be elected in 2024.
comment
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The interviewer is just weird man
Well he’s a billionaire so…
Amazon is overvalued
it's not
mp517q It is now
@@mp517q trees don't grow forever...way too expensive
Who are these ignoramus interviewers who keep interrupting Shiller?
If he won the Nobel prize he must have some important things to say, whether you agree with them or not. Those interviewers were terrible, wisercracking and laughing. Very low class.
Amen! Glad to see that I am not the only one annoyed. I wonder why they bothered to invite Prof. Shiller to the show.
How is the bald guy even pretending he's on the same level as Shiller?
He’s a billionaire
brought to you by a selling stock company......get real.