patrick.net

5:50
http://www.celebritynetworth.com/watch/ZeC34GWALD0/robert-shiller-finance-the-good/

Each man puts his money where his mouth is. The core of Siegel's investments is in indexed mutual funds -- that is, funds that reflect broad market sectors or the market as a whole. "The average investor will do best by diversifying among all classes of stocks," Siegel writes in the third edition of Stocks for the Long Run, due out this spring. "Trying to catch styles as they move in and out of favor is not only difficult, but also quite risky." Siegel has cooled off a bit on indexing the market as a whole, now preferring to tilt toward "small value" stocks.

Shiller, by contrast, has almost nothing in the market, aside from a few shares of Kmart inherited from his mother, which he obviously holds only for sentimental value. Much of his net worth is tied up in Case Shiller Weiss, a real estate firm that develops risk management products like home equity insur-ance and real estate indexes. (Siegel is on the firm's advisory board.) Like Siegel, Shiller believes in diversification, but his definition is different: He holds municipal bonds, real estate, investment trusts, and an international value fund that invests in low-priced stocks outside the United States. But perhaps his favorite vehicles of all are "index bonds" -- U.S. Treasury Inflation-Protected Securities (TIPS) that offer a guaranteed 3.5 percent return above inflation.

"If someone had to pick -- all my money in the stock market or all my money in index bonds," Shiller says, "TIPS would win hands down. But very few people are able to keep that perspective right now. There's just so much excitement around the stock market and so many varied games to play, and for many people it's a part of their lives -- you know, it's just fun to watch, and index bonds can't compete with that."

http://cowles.econ.yale.edu/news/shiller/rjs_02-05-bloomberg_shil-sieg.htm

Raw says

I do think the index Shiller devised must have made him a lot of money.

Yeah, I just read it was sold to Fiserv and S&P. I figure that was a nice deal for him.

robertoaribas says

Case and Shiller wanted people to be able to hedge risk in real estate, like you do in anything else...

I wish I'd explained this more like you. Yours made more sense. I get confused about how much of his idea was aimed at industry and how much was aimed at individual investors.

http://www.thefreelibrary.com/Fiserv,+Inc.+Acquires+Case+Shiller+Weiss,+Inc.%3B+Leading+Provider+of...-a085936347

FunTime says

"If someone had to pick -- all my money in the stock market or all my money in index bonds," Shiller says, "TIPS would win hands down.

I like stocks, but if I had to choose something in bonds, TIPS would be it.
With rates close to zero, rates cannot go anywhere else but up, which would spell a disaster for bonds. Ofcourse, Uncle Sam will be footing most of that bill when the time comes.
http://www.cnbc.com/id/100431901

Raw says

He is brilliant when it comes to devising analytical tools and formulas, but when it comes to forecasting he is a disaster. Ask yourself, if he can accurately forecast why isn't he a billionaire?

actually he has done well $$$ writing about the irrational behavior of investors. and frankly his predictions did come true both to the stock and later home price bubble. Frankly, his book Irrational Exuberance i expect to be classic reading for decades to come but not as economics but behavior sciences.

"The behavioral finance school gained new credibility following the October 1987 stock market crash. Shiller's work included survey research that asked investors and stock traders what motivated them to make trades; the results further bolstered his hypothesis that these decisions are often driven by emotion instead of rational calculation. Much of this survey data has been gathered continuously since 1989, and is available at Yale's"

He did not create any tools that were not already there be they the Price to Earnings multiple for stocks or Home price to individual income multiple to home prices... its been around for decades for any individual to see.

If anything, Shillers tools is a simple question... Why do you believe you will get 20% appreciation on your home ? And let the emotions fly.....