They Saw The Trouble Coming — And Some See More Ahead

Kiplinger’s takes a look this week at nine people who “called it right” in predicting the credit crisis and market collapse, and asks what they see coming for the year ahead. Some — like Jeremy Grantham, Robert Rodriguez, and Nouriel Roubini — are people whose opinions we’ve detailed in past posts, but here’s a look at the predictions (most of which have to do with the economy, not the stock market) for some of the others: Peter Schiff, president Euro Pacific Capital: Dollar will keep falling, leading to a resurgence in commodities. “That will pierce the bubble in the bond […]

Shiller P/E

Fortune’s Shawn Tully recently looked at the Shiller P/E model (developed by Yale University professor Robert Shiller), which calculates the P/E ratio of the market using ten years worth of earnings (vs. just the earnings of the last 12 months). Currently, the market P/E based on the Shiller model is around 15, which is lower than it’s been in 20 years. The bottom line is the lower the P/E is when you invest the higher returns you will most likely get in the future. On his Yale web page, Shiller has posted the historical data he uses to calculate the […]