Animal spirits indeed: Professor Shiller says that, near-term, Trump-euphoria is making him question the relevance of historically reliable valuation metrics. (You mean ‘this time is different?’ Heard that one in 1998-2000 and 2006-08, as well).
Still he acknowledges that at current over-valuations, stocks are priced to under-perform 10-year Treasury bonds for the next decade (even though 10-year yields are less than 2.4% today) . Translation: stay at the craps table and party for a while if you like, but realize the hangover is likely to cause capital deficits for the next 10 years, at least. Good trade-off? Here is a direct video link.
Robert Shiller, Yale University professor of economics, discusses why the current market environment is reminiscent of the stock market crash of 1929.
Here is the picture of relative valuations for US stocks since 1900. Everyone has to decide how much of their savings they are willing to gamble with and can afford to lose.
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