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Since June 2009, when that interview was conducted, the S&P500 has more than doubled, not including dividends, so I hope he switched back or he did, in a sense,
by enoch_r 11y ago
Since June 2009, when that interview was conducted, the S&P500 has more than doubled, not including dividends, so I hope he switched back or he did, in a sense, "lose" 50%.
- 6stringmerc 11y agoCounter point: Numerous financial experts assert the current valuations within the stock market do not reflect the underlying fundamentals; or, in other words, ZIRP allows for cheap debt in the bond markets which many firms are using to aggressively buy back stock, thereby artificially inflating the market value. Thus, "a correction" is due and his statement is still valid from a conservative investing standpoint.
- scoreponok 11y agoThis is hindsight bias. The markets could have easily went the other way. Market timing is notoriously futile. If you want to play "what if?" and pick arbitrary dates then he could have as easily put his cash position into equities lets say beginning of October 2008? Then his advice would seem very wise indeed.
- enoch_r 11y agoI agree, market timing is futile. Roubini is unwise not because he lost money, but because he believed he could time the market. Mountains of evidence suggest that the RoR on stocks is positive and higher than that of lower-risk assets, Roubini claimed that the opposite was temporarily true. This is a good example of an attempt at market timing that failed.
- astrange 11y agoEven if he'd done that he would be better off than using a savings account. http://dqydj.net/sp-500-return-calculator/ http://dqydj.net/sp-500-return-calculator/ Picking arbitrary dates to buy a lot of equities and then not selling them isn't market timing; trying to trade repeatedly on the right dates is. That's how you lose all your money.