There's so much disagreement about investing, and it's because nobody really knows.
Interpretation
Investing is complex and often misunderstood, leading to differing opinions.
Robert J. Shiller highlights the inherent uncertainty and complexity of investing, suggesting that the disagreements among investors stem from a lack of definitive knowledge about the markets. This quote reflects the diverse perspectives and strategies within the field of investing, indicating that even experts can have differing views due to the unpredictable nature of financial markets.
In practice
During a finance seminar, this quote can be used to illustrate the complexity of financial markets.
Those on the downside of rising economic inequality generally do not want government policies that look like handouts. They typically do not want the government to make the tax system more progressive, to impose punishing taxes on the rich, in order to give the money to them. Redistribution feels demeaning. It feels like being labeled a failure.
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
That's the world we live in: when it comes to economics, people have emotions; it's not like chemistry or physics.
Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.
We should not be focusing on quick solutions. The really important concern for policymakers everywhere is to prevent disasters - that is, the outlier events that matter the most.
If we wait until income inequality is much more severe, we will have a whole class of new superrich who will probably feel entitled to their wealth and will have the means to defend their interest. That's already gone far enough. We shouldn't let it become more extreme.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
A single agency responsible for systemic risk would be accountable in a way that no regulator was in the run-up to the 2008 crisis. With access to all necessary information to monitor the markets, this regulator would have a better chance of identifying and limiting the impact of future speculative bubbles.
When somebody asserts that a stock has an earning power of so much, I am sure that the person who hears him doesn't know what he means, and there is a good chance that the man who uses it doesn't know what it means.
It is absurd to think that the general public can ever make money out of market forecasts.
When I hear complaints about less liquidity, remember there is such a thing as too much liquidity.
Saving is a fine thing. Especially when your parents have done it for you.
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