Re: Dow 36,000

John Clark (
Sat, 23 Oct 1999 13:05:21 -0400

Robin Hanson <> Wrote:

    >Shiller then *tests* this expectation

> by looking at real data. If you're going to then dismiss his analysis
> as "technical" because it refers to real data, then you seem to me to
> be saying that you are so sure that you are right about stocks that data
> is irrelevant.

Yes, Shiller looked at data, he looked at a mountain of it until he found two variables that produced a straight line for a while. He doesn't say why they give a better picture of reality than thousands of other variables, he doesn't explain why a deviation from that straight line should be a cause for worry. That's why I call it "technical analysis".

I have another even more fundamental objection, it hasn't worked. It has been nearly 4 years since the prediction, not a trivial fraction of a human lifetime, and in that time the market has exploded upward. Someday we'll enter a down market but even if it crashed tomorrow I wouldn't be impressed with Shiller's predictive ability. Even a stopped clock is right twice a day.

John K Clark