Yale's Robert Shiller Is Worried Stocks Could Be In A Bubble (Video)

Robert Shiller, Yale economist and co-founder of the Case-Shiller Home Price Index and MacroMarkets, told Fox Business on 9/21/2011 that he thinks real home prices (inflation adjusted) could overshoot to the downside. But more importantly, since stock portfolios are 15.3% of household net worth as of Q2 2011 (which doesn't include mutual fund shares, see Fed data or the snapshot below), Shiller is worried that the stock market could be in a bubble.

If you've been following Shiller's historical stock market data, you can see that the S&P cyclically adjusted price/earnings ratio (average inflation-adjusted earnings over the past 10 years) is currently around the upper end of the 130 year range (since 1881). Multpl.com has charts available from Shiller's data sets. So, will stock valuations overshoot to the downside like housing? He was also asked about gold. Watch the video after the jump.

Source: http://video.foxbusiness.com/v/1174562538001/housing-market-still-suffering-despite-low-prices-mortgage-rates

Household Net Worth Q2 2011 (Federal Reserve)

More news from today:

SHILLER: House Prices Probably Won’t Hit Bottom For Years (Henry Blodget interviews Bob Shiller at Daily Ticker)