Professor robert shiller, who accurately predicted the Internet bubble with his book Irrational Prosperity Based on Fundamental Analysis, recently made a unique analysis of the major global stock markets. Through decades of historical data analysis, Professor Schiller found that the ratio of the total market value of the stock market to the national GDP is a good market valuation index: when the ratio is lower than 50%, the market is significantly underestimated; The proportion is between 50% and 75%, which is moderately underestimated in the market; When the ratio is 75%-90%, the market valuation is reasonable, and when it is higher than 90%, it is overestimated. At present, the market value of A shares only accounts for 45.2% of GDP last year, which is obviously underestimated. As for the expected rate of return in the market, according to the growth rate of operating income of listed companies, dividend level and changes in stock market valuation, the professor concluded that the expected rate of return in China stock market was 30. 1%. In addition to studying and writing books, Professor Schiller is also willing to apply his ideas to practice. As one of the founders, Professor Robert co-founded Case Shiller Weiss, Inc. with Mr. Allen Weiss, which is located in Cambridge, Massachusetts, USA, and is a company dedicated to studying the real estate price index and the automatic valuation model of the real estate market.
In 2002, the company was acquired by Fiserv and renamed as Fiserv CSW Company. From 65438 to 0999, together with Mr. Allen Weiss, he established Macro Securities Research Co., Ltd., which has two subsidiaries, Macro Finance and Index Science, and its goal is to promote the securitization of abnormal risks.
Schiller wrote many articles about financial markets, behavioral economics, macroeconomics, real estate, statistical methods, market moral judgment and public choice.
Market Fluctuation (published by MIT) written by 1989 discusses in detail how to face the price fluctuation in the speculative market by combining mathematical analysis with behavioral analysis. Macro-market: Creating an Organization to Manage Social Large-scale Economic Risks (published by Cambridge University Press) written in 1993 puts forward various new risk management contracts. Such as national income or real estate futures contracts, which will lead to a new revolution in the field of risk management that adapts to the living standards of modern people. This book won the 1996 American Teachers' Insurance and Annuity Association-University Retirement Securities Fund (TIAA-CREF) Samuelson Award; Another book that China people are most familiar with, Irrational Prosperity (published by Princeton University Press in 2000 and Broadway Books in 20001year), introduces and analyzes the relevant contents of speculative bubbles, paying special attention to the securities and real estate markets since 1982, and won the same fund in 2000 (* * *).
In the late 1990s, stimulated by the myth of new economy, American stock market showed unprecedented prosperity. Stimulated by investors' high investment enthusiasm, the Dow Jones index, the Standard & Poor's 500 index and the Nasdaq index in the US stock market hit record highs. As an economist, Professor Shearer discovered the hidden crisis behind this apparent prosperity with his keen insight.
In 2000, Professor Shearer published a new book "Irrational Prosperity" for the general public (Princeton University Press published in 2000, and its translation was published by Renmin University of China Press in April 2006, 5438+0).
In this book, Professor Shiller compares the price-earnings ratio changes of American stock market in recent 140 years, and points out that in the late 1990s, the sharp rise of American stock market index was an abnormal phenomenon divorced from the actual economic operation. He further analyzed the reasons for this irrationality in detail. However, just as this book was published, there was a huge earthquake in the American stock market. At the beginning of March 2000, the Dow Jones index fell by nearly 20% from the historical high of 1 1700 in just a few weeks, and the Nasdaq index also suffered heavy losses, from 5078 on March 24th, 2000 to 3227 on April 7th.
At this time, the public's interest in irrational prosperity increased greatly and they rushed to buy it. At the same time, Business Week, new york People, The New York Times and Financial Times also praised the book and made positive comments in succession. This book was also rated as a non-fiction bestseller by The New York Times. The author Professor Schiller has become the darling of the media. In just two weeks, he frequently appeared in the ace financial programs of CNN, ABC and PBC. There is also a little-known story about the origin of the title of this book: 19961February, Professor Shiller and one of his colleagues reported their pessimistic expectations for the stock market to the then Federal Reserve Chairman Alan Greenspan. Two days later, Greenspan used the word "irrational expectation" for the first time in that famous speech that attracted widespread attention, expressing his concern about the stock market at that time.
After the success of irrational prosperity, Shearer began to pay attention to a more macroscopic and complicated question-where should finance develop in the 21century? Professor Shiller gives the answer to this question in his forthcoming book, The New Financial Order: 2 1 The Risk of the Century. In the book, Professor Shearer first warned the world that there is an excessive superstition about the stock market in the current society, and everyone is dreaming of getting rich through the stock market. However, this excessive superstition of the stock market will only contribute to the instability of the financial system. This book mainly analyzes the extensive influence of finance, insurance and public finance on our future life. Princeton University Press published it twice in eight languages in 2003 and 2004.
Shearer's warning contains such a meaning that is often ignored by the world-that is, the stock market is unstable, and the ups and downs of the stock price determine that people cannot get stable income from it; At the same time, because the stock market attracts too much attention, people inevitably lack necessary attention to some factors in the real economy, such as the income brought by our human capital or the income brought by our own real estate. These factors belong to the category of real economy and have a far-reaching impact on our quality of life. With the deepening of economic globalization, the risks faced by these real economic elements have increased dramatically at an unprecedented rate. With his foresight, Robert Shiller provided us with a prescription to solve the risks of these real economic factors through the book "New Financial Order: 2 1 Century".
In fact, every member of society may become a victim of these economic uncertainties. These real economic risks may affect our jobs, our families, our communities and even the economy of our whole country.
However, our current financial system arrangement (we can also call it financial order) is almost powerless to these risks, so he put forward six plans to use modern information technology and advanced financial theory to resolve these realistic economic risks, thus building a new financial order of 2 1 century. In Professor Shiller's vision, a database system that contains all kinds of risk information and can process these information in time constitutes the material basis of the new financial order. With the help of this super database system, all trading risks and various profit opportunities in the global market will be promptly responded, and new financial instruments will be produced. Then, people disperse and dissolve these real economic risks by trading these new financial instruments in the financial market.
Professor Schiller's idea is similar to insurance, which allows more people to share risks through financial transactions. The risks that Professor Schiller wants to resolve are all areas that the insurance industry dare not set foot in at present. This bold idea seems incredible, but don't forget that a century ago, people at that time sneered at the idea of property insurance and life insurance.
This book has also been well received by economic theorists. Professor Joseph Stiglitz, winner of the 200 1 Nobel Prize in Economics, praised the book as "undoubtedly the most important work in this important field", while the famous American columnist Bede Bernstein praised Professor Schiller's economic skills and extraordinary vision in the book.
However, the most enlightening comment came from another Nobel laureate in economics, george akerlof. "In the New Financial Order, he (Professor Shearer) told us how the new financial order can improve everyone's situation by reducing the uncertainty in the economy. No matter the rich, the middle class or the poor, they can all enjoy the benefits brought by the new financial order. In this sense, he pointed out the direction of financial development in 2 1 century. "
Finance and a Better Society is robert shiller's latest work, which can be said to be robert shiller's masterpiece. CEO, investment manager, banker, investment banker, lender, trader, market maker, insurance company, market designer, financial engineer, derivative supplier, lawyer, financial consultant, lobbyist, supervisor, accountant, commodity financier and policy maker, all of which you know or don't know, will be described in Shiller's book. This book is neither a hymn of the financial community nor a painful narrative of financial ills, but puts finance in the social background and has its own objective comments on its merits and demerits.
Besides studying and writing books, Professor Shearer is also willing to apply his ideas to practice. He is currently one of the founders of Case Shiller Weiss in Cambridge, Massachusetts, USA. This is a company specializing in economic research and information work. He is also one of the founders of Macro Securities Research LLC located in Cambridge, Massachusetts, USA, which aims to promote the securitization of abnormal risks.