Despite the summary above and his bearish commentary, Shiller does make the case that one should be buying into the weakness in the markets and that one should be careful. Interestingly he says that equities are overvalued, but not by alot in historical terms. I make my own graphs using his data from the site http://www.irrationalexuberance.com/. The correlation of long term P/E's to equity performance is remarkable. It is tough to discern if stock prices lead to long term P/E declines or the other way around here, but the linkage is quite obvious. Did I mention that we are in a recession?
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