Robert Schiller, Nobel Prize, Manhattan discussed on Safe Retirement Solutions


It's a mouthful not glad we head penny record that force. So wait got Christmas. Do you go you go to your dad's? What are you guys pretty much a traditional old school Christmas for the Kaufman family? We have Christmas Eve dinner at my at my dad's house, go to services that evening, and then, you know, Christmas day, it's at my house since wide open. Everybody's opening gifts and carrying on as the kids. Grow up. My son Ryan who is in the air force in New Mexico and his wife, Laura. Won't be in this year. Shame. We're lucky. Both our kids are gonna be at being town and at the same time with their significant others, and they're all staying at the house, and that's good. And none of us have any grandchildren yet. Not yet. But that's a common around the corner. Sure. Hope so right. So Terry rod you guys just got back from your annual Christmas trip to New York City. Let's talk about that a little bit. Oh, yeah. We had a blast every year. How long have you been doing this Tony twenty five years or so at least it goes by? I mean and go up to New York, we usually stay. Well, we always say midtown Manhattan. And we'll go to show we do do Fifth Avenue. We do all the windows. Bergdorfs bergdorfs have birds. Know I was talking with clients when we were young and we used to go downtown Baltimore. Now, my gosh, we get in Howard street and look the windows in the department stores. I mean downtown Baltimore was like going down to well. It wasn't as big as Fifth Avenue. But it was it was pre you'll come on. It was nice. Fun. I remember as a kid the monkeys and the window playing their music, man. Now you to both. You're both young at heart though. Right. I'm sure you're young. Okay. That out there. We'll tell you worked at Stewart's worked at the head company. But that was a big deal. But anyway, so New York it anyway. No, it's not Manhattan. But but it was a lot of fun. But we did Rockefeller Center. We did the tree. Calcium Mark Chelsea gray restaurant. How about the Trump Tower by Trump Tower? Police are still guarding. Yeah. We went there couple years ago, and what will up Fifth Avenue, and they had a protestors out there the paid protesters that George Soros was paying the people that was that was an inconvenience, but they weren't there this year. Thank God good financial way. But we had such a good time. Everybody got to pick what they wanted to do. So there were six of us. So we did a lot of different man. I did a museum. We did a museum. We went to church. We went to mass at the old Saint Patrick's cathedral, usually get a massive the new that new. The original Saint Patrick's cathedral, which is in Greenwich Village. That's pretty cool. Michael's twenty. You've been doing this now twenty five years. I went up there the kids were young, right? Oh, yeah. That was three years old. Oh, we I started doing that had a bliss at it's good. But anyway, let's get back to our show. So. So much risk and volatility in the mart. Why are we seeing so much risk and volatility in the markets will one big reason can be attributed to a single indicator that I like to watch very closely. It's the Schiller price index. Robert Schiller won the Nobel prize in comics, and he's got this index to measure things like volatility instead of getting technical. Let's keep it simple. And put it in some terms that we can all understand. Now. Imagine you have a favorite bottle of wine. You go to a restaurant you go to a store, and you wanna treat yourself you pick up a bottle at the store and the wind isn't extravagant a pricey. But it's pretty consistent. It's a good value. Let's say it's sixteen dollars a bottle. Now, imagine you're at the grocery store, and now you decide to pick up a bottle to share with your friends. Now, you get the shelf and grab one. Now, the price is nineteen dollars a bottle. Whoa. What happened? Why did the price go up? Well, it must be supply and demand you say to yourself. Well, I suppose people are catching onto how good this wine is and more and more people are buying it and pushing the price up. Oh, well, it's still a tasty wine, and it's only three dollars more. So you buy well, months go by and you're celebrating. So you head down to the market you pick up your favorite wine. But this time you really taken back because you approach the shelf, and you see your favorite wine. You can't believe what you're saying. It has to be mistake. Instead of sixteen dollars a bottle now it's twenty eight dollars a bottle. Well, how could this be? It's the same vantage same vineyard same blend. Everything is the same. It went from sixteen dollars to nineteen dollars. And now, it's twenty eight dollars. Well, maybe it's time to start looking for otherwise, maybe just as delicious. But much better value. Now, I share the story because that's exactly what's happened in the stock market again, one of the most valuable market forecasting tools that we used to help determine if stocks are on sale fairly priced or ridiculously expensive is the Schiller PE ratio named after Robert Schiller who won that Nobel prize in economics. You see the fare cost of stocks is really sixteen dollars near the stocks are fairly priced when this chiller PE ratio is around sixteen. Here's the rub. We are nowhere near that price. Stocks are currently at twenty eight dollars just like that bottle of wine. So maybe it's time to start looking at other options that may be Justice delicious. But a better value. You follow what I'm saying here? But the shoulder PE ratio was really high right now, and you can actually go online and look up his Chartier. The only time it's been higher is back in December of nineteen ninety nine and that was right before the dot com. Bubble burst and the market took a big hit for almost two years. So you got to prepare for this stuff..

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