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Shiller on Housing


Parsad
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Guest VAL9000

I didn't know that real prices of homes remained flat for 100 years.  I guess that means I have no common sense.

 

For what it's worth, I found Shiller's brief interview more valuable than your rant.  So, uh, why post that?

 

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What was so good about it?  The man just regurgitated what's been known for a long time about housing increasing with inflation (common sense should have told you this if you hadn't seen the long known data) and the 5th grade notion that all data points can't be above the average. I think Ben Graham covered that obvious one many years ago. I got that far then tuned out when he mentioned homeowners having a means to buy protection for home price decline. Price is a function of leverage if leverage exist in a system. The more leverage the higher the correlation, that is until it all collapses of it's own weight. In the old days they wanted 20 percent down, that was to protect the banker, and he went further than that, he wanted to see that you saved it over time. He looked back over your bank records to see this. No gift from mommy and daddy and no one time windfall. So somebody actually put up a sizable portion of the purchase from hard earned savings and how do you think their thinking on price differed from those with no money down or money from somebody else's hard work?  

 

So much noise and slop, why post this?  Shiller is Of a class that can offer no insight.

 

DW

In what sense does he offer no insight? His long term focus on data has lead him to be particularly prescient at spotting anomalies in different asset classes. His datasets are a wonderful toolkit for value investors to say nothing of the innumerable regulators and politicians who would be aided in their policy making activities by quickly reviewing his data. Also, what is wrong with trying to think of a new insurance market that homeowners could utilize to limit their exposure to the price of their home, or, limit their exposure to being unable to come up with the money to pay their mortgage? I don't think you are going to do much better than disability insurance and life insurance but what is the harm in trying to explore that route?

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I have wathced him a few times and his comments need to be taken with a grain of salt.  When he describing the data on housing and its history (in particular the historical overshoots) it is useful but when he tries to predict the future you need to take that with a grain of salt.  I would instead look at what value investors like Einhorn, Berkowitz and Brookfield are doing.  They are buying lots and raw land in areas where there is supply constraint.  Schiller is at times also too academic with his home price hedging instruments which never gain traction (like Case-Schiler futuers and his Macroshares).

 

Packer

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My preferred accomplishment from Schiller was it's studies on the price of a stock VS all it's future discounted dividends. He basically explained that the market overshoot by a wide margin by discounting all the discounted future dividends of the SP500 and adding the SP500 chart on the same chart.

 

You guys might want to watch it's course on Columbia University. Pretty interesting.

 

BeerBaron

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What was so good about it?  The man just regurgitated what's been known for a long time about housing increasing with inflation (common sense should have told you this if you hadn't seen the long known data) and the 5th grade notion that all data points can't be above the average. I think Ben Graham covered that obvious one many years ago. I got that far then tuned out when he mentioned homeowners having a means to buy protection for home price decline. Price is a function of leverage if leverage exist in a system. The more leverage the higher the correlation, that is until it all collapses of it's own weight. In the old days they wanted 20 percent down, that was to protect the banker, and he went further than that, he wanted to see that you saved it over time. He looked back over your bank records to see this. No gift from mommy and daddy and no one time windfall. So somebody actually put up a sizable portion of the purchase from hard earned savings and how do you think their thinking on price differed from those with no money down or money from somebody else's hard work? 

 

So much noise and slop, why post this?  Shiller is Of a class that can offer no insight.

 

DW

 

David, did someone force you to watch the interview?  Did you pay to use this site?  If you don't like a specific subject matter, feel free to ignore it. 

 

This board has operated very well for nine years, and I personally don't have time to listen to someone tell me I'm wasting their time, when I run this for free.  There are plenty of other message boards where that sort of attitude (read "noise and slop") may be appreciated, but this isn't one of them. 

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SmallCap:

 

Audio version:

http://itunes.apple.com/us/itunes-u/financial-markets-audio/id341651121

 

Video version:

http://itunes.apple.com/ca/itunes-u/financial-markets-video/id341651306

 

I've seen a few but not as many as I should.  It's good stuff though.  And the price can't be beat.

 

if anyone doesn't use itunes, these are also here:

 

http://videolectures.net/yaleecon252s08_financial_markets/

 

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What was so good about it?  The man just regurgitated what's been known for a long time about housing increasing with inflation (common sense should have told you this if you hadn't seen the long known data) and the 5th grade notion that all data points can't be above the average. I think Ben Graham covered that obvious one many years ago. I got that far then tuned out when he mentioned homeowners having a means to buy protection for home price decline. Price is a function of leverage if leverage exist in a system. The more leverage the higher the correlation, that is until it all collapses of it's own weight. In the old days they wanted 20 percent down, that was to protect the banker, and he went further than that, he wanted to see that you saved it over time. He looked back over your bank records to see this. No gift from mommy and daddy and no one time windfall. So somebody actually put up a sizable portion of the purchase from hard earned savings and how do you think their thinking on price differed from those with no money down or money from somebody else's hard work? 

 

So much noise and slop, why post this?  Shiller is Of a class that can offer no insight.

 

DW

 

David, did someone force you to watch the interview?  Did you pay to use this site?  If you don't like a specific subject matter, feel free to ignore it. 

 

This board has operated very well for nine years, and I personally don't have time to listen to someone tell me I'm wasting their time, when I run this for free.  There are plenty of other message boards where that sort of attitude (read "noise and slop") may be appreciated, but this isn't one of them. 

 

I now know what you meant in the other post.  I caught up on some old threads and man, it does seem like there is a lot of belligerence on this forum lately.  Although, now that I think of it, I contributed to that a bit in my sniping remarks when I first joined.  I feel embarrassed by that.

 

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