However, from my perspective, Robert Shiller just gave the green light for investors to continue to buy overvalued stocks.
I'm afraid that I'm not following. Why is that the case? If Shiller says that investors have become sensitive to the overvaluing of stocks, wouldn't it make sense to wait for a crash if crashes are likelier than before because of the increased nervousness of investors?
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I feel his EXCESS CAPE metric is just massaging the numbers.
The CAPE has no peers as a predictor of where big cap shares are headed. And right now, it's flashing bright red. The current reading, based on the S&P's record close of 3853 on January 21, is 35.13. It's only been that high in one period over the 140 years: in the run-up to the tech bubble that burst in 2000, sending the S&P down 44%.
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