Irrational Exuberance [Anglais] [Relié]

Sequels often disappoint when compared to their predecessors, but author Robert Shiller has proved the exception to the rule with his second edition of Irrational Exuberance. When the original book released in 2000, Shiller's prescient analysis of bubble-like market behavior provided perspective on the painful meltdown of stock-price valuations that subsequently occurred. Five years later, the Yale professor's bearish predictions about real-estate valuations are enough to give any savvy investor or homebuyer pause.

Shiller is one of several well-known economists and pundits who've begun a running dialogue in the last few years around the drawbacks of unchecked free markets. Few writers, though, dissect the phenomenon of bubble behavior as clearly and thoroughly as Shiller does. As with the first edition of his book, Shiller begins this one with reams of quantitative data around the late 1990s stock-market runup. This new edition adds data on real-estate price trends in the early 2000s, and points out the striking parallels between the earlier stock-market boom and bust, and current trends with housing prices in the United States. Shiller actually believes the two phenomena are related; as investors lost confidence in the stock market and moved their money into real estate, one asset class fell while the other rose. According to Shiller's analysis, the pattern is destined to repeat itself.

Aside from the initial data, the real strength of Irrational Exuberance is the straightforward, almost clinical way in which it explains why things happen as they do. The book walks readers through structural reasons for market bubbles, then ventures into "softer" analyses which professional economists less confident than Shiller would be scared to touch. It examines cultural factors behind market bubbles, such as hype-mongering news media, and psychological factors, such as herd behavior.

Another improvement in this latest edition of Shiller's book is his inclusion of more personal commentary, and he mentions the influence that his wife, herself a clinical psychologist, has had on his intellectual development and his view of psychological impacts on economic behavior. Other personal insights from Shiller center on experiences he had while touring and lecturing around the first book, and some of the most interesting passages are those in which he describes common questions or feedback from his audience, and what he thought in reaction--but didn't voice while on his tour.

In the end, Shiller closes his book with an intriguing set of policy proposals. He argues for a revamping of the U.S. social security system, a new system of house-price insurance for homeowners, and risk reduction through portfolio diversification. Fans of the brainy academic will note with approval that Shiller practices what he preaches: he has begun trying to implement some of his ideas in the real world through two private consulting firms he has founded, Macro Securities Research and Macro Financial. The hope is if Shiller's as correct with this second book as he was with his first, readers will all learn something from these new companies. --Peter Han

Taking his book's title and thesis from Alan Greenspan's 1996 description of investors, Shiller (economics, Yale Univ.) studies the current booming U.S. stock market in historical terms. His research into past U.S. and international markets indicates that during every speculative bubble there was always widespread consensus that high valuations were justified by each market's special circumstances. Every large market correction seemed to result from popular consensus rather than specific events or news. Shiller says that past bull and bear markets, though often based initially on sound fundamental reasoning, fed upon themselves to go beyond what the facts justified. He challenges the efficient market theory, demonstrating that markets cannot be explained historically by the movement of company earnings or dividends. He concludes that the current U.S. stock market is a speculative bubble awaiting correction. While the book certainly belongs in all academic business collections, public libraries should also purchase it as a counterweight to the plethora of get-rich-quick investment guides.
-Lawrence R. Maxted, Gannon Univ., Erie, PA
Copyright 2000 Reed Business Information, Inc. --Ce texte fait référence à lédition Relié .

No one has explored the strange behavior of the American investor in the 1990's with more authority, or better timing, than Robert J. Shiller. --Ce texte fait référence à lédition Relié .

During the past decade, he has emerged as a leader in the new field of "behavioral finance" which seeks to apply lessons learned from other academic disciplines, particularly psychology to economics. Irrational Exuberance is not just a prophecy of doom. Encompassing history, sociology, and biology, as well as psychology and economics, it is a serious attempt to explain how speculative bubbles come about and how they sustain themselves. --Ce texte fait référence à lédition Relié .

Irrational Exuberance should be compulsory reading for anybody interested in Wall Street or financially exposed to it; at the moment that would be roughly everybody in the United States, from Alan Greenspan down to the proverbial shoe-shine boy. --Ce texte fait référence à lédition Relié .

Alan Greenspan faces long odds in trying to nudge the stock market to where he'd like it to go. The chairman of the Federal Reserve has argued that the buoyant market--by making Americans feel so much wealthier--has triggered a consumer spending spree that threatens inflationary wage pressures. The idea is to dampen spending and the ravenous appetite for stocks. Anyone who thinks this will be easy should read "Irrational Exuberance," a new book by Yale University economist Robert J. Shiller. Beyond arguing that the present market is a "speculative bubble," Shiller contends that investor psychology is so given to herd behavior that it's almost impossible to manipulate or even influence. The market can "go through significant mispricing lasting years or even decades. --Ce texte fait référence à lédition Relié .

Thus it is an event of some significance that Shiller has written a crystal-clear and tough-minded critique of the factors that have driven US stock markets to their current levels and called his book ''Irrational Exuberance.'' In it, he argues that Federal Reserve chairman Alan Greenspan had it exactly right when he uttered the famous phrase in a speech in 1996. The current high levels of the market don't represent a consensus judg ment by a cadre of sober experts, says Shiller. Instead, today's market is sky high because of wishful thinking by millions of people, egged on by professionals in and around Wall Street whose incentives all run in the direction of the more the merrier. --Ce texte fait référence à lédition Relié .

"Irrational Exuberance is a clinical and unnerving study of the psychological origins of volatility in financial markets, including real estate".

"Do we need to go from SUVs to Hummers? Maybe we should revert to sedans".

"Anyone considering buying real estate as an investment would be well-served by reading his thoughts on the subject first".

"Even if you don't buy his reasoning, he gives you plenty to think about".

May be one of the most important books on higher education.... It is certainly one of the most interesting. --Ce texte fait référence à lédition Relié .

No one else has examined the behavior of the American investor in the 1990s with more authority or better timing. --Ce texte fait référence à lédition Relié .

In this timely and prescient update of his celebrated 2000 bestseller Irrational Exuberance, Robert J. Shiller returns to the topic that gained him international fame: market volatility. Shiller breaks new ground in this second edition by laying out in even clearer and starker terms the market excesses that continue to destabilize the economy and disrupt our lives.

Having predicted the stock market collapse that began just one month after the first edition was published, he now expands the book to cover other markets that have become volatile, particularly the recently red-hot housing market. He includes a full chapter on domestic and international housing prices in historical perspective.

Shiller amasses impressive evidence to support his argument that the recent housing market boom bears many similarities to the stock market bubble of the late 1990s, and may eventually be followed by declining home prices for years to come. After stocks plummeted when the bubble burst in 2000, investors moved their money into housing. This precipitated the inflated real estate prices not only in America, but around the world, Shiller maintains. Hence, irrational exuberance did not disappear--it merely reappeared in other settings.

Building on the original edition, Shiller draws out the psychological origins of volatility in financial markets, this time folding real estate into his analysis. He broadens the evidence that investing in capital markets of all kinds in the modern free-market economy is inherently unstable-subject to the profoundly human influences captured in Alan Greenspan's now-famous phrase, "irrational exuberance."

The ultimate solution to this troubling condition, he maintains, would involve better-designed public institutions such as a revamped social security system, new forms of insurance to protect people's incomes and homes, and a broader array of investment options. As was true of its predecessor, the second edition of Irrational Exuberance is destined to be widely read, discussed, and debated.

"This is an excellent book by a distinguished scholar. It raises an issue of the utmost importance for the U.S. economy and presents a persuasive case that the U.S. stock market may be significantly overvalued. It is well written for a popular as well as a professional readership." (Michael Brennan, Anderson School of Management, University of California, Los Angeles) --Ce texte fait référence à une édition épuisée ou non disponible de ce titre.

Robert J. Shiller is the Stanley B. Resor Professor of Economics at Yale University. He is author of "The New Financial Order: Risk in the 21st Century" (Princeton) and "Market Volatility and Macro Markets", which won the 1996 Paul A. Samuelson Award.