Thursday, May 19, 2011

Robert Shiller: "My only bullish call is farmland"

Back in March we posted "Here Comes Another Bubble: Farmland (FAM)" which linked to Prof. Shiller's Project Syndicate op-ed "Bubble Spotting":
...But my favorite dark-horse bubble candidate for the next decade or so is farmland – and not just because there have been stories in recent months of booming farmland prices in the US and the United Kingdom.

Of course, farmland is much less important than other speculative assets. For example, U.S. farmland had a total value of $1.9 trillion in 2010, compared with $16.5 trillion for the US stock market and $16.6 trillion for the US housing market. And large-scale farmland bubbles are quite rare: there was only one in the US in the entire twentieth century, during the great population scare of the 1970’s....
Here he is again, this time via Investment News:
Green acres best bet for making green, Yale's Shiller says
Limited supply will drive prices of farmland up over the next decade; 
stocks will come a-cropper
With the exception of farmland, investors should keep their expectations for investment returns low for at least the next 10 years, according to Robert Shiller, an economics professor at Yale University.

Speaking during an opening session of the Investment Management Consultants Association's annual conference in Las Vegas, Mr. Shiller said he expects stocks to gain a mere 2% to 3% annually over the next decade.

In his presentation, Mr.Shiller, well known for his S&P/Case-Shiller Home Price indexes, illustrated how farmland participated in the real estate bubble from 2000 to 2005, but did not fall in stride over the past few years.

“My only bullish call is farmland,” he said....MORE 
HT: FT Alphaville

Here's his September 4, 2007 call:
Some U.S. Housing Markets could drop 50%- Shiller

And a  paper that I used in a November, 2010 argument against QE2:
(see also the May 18, 2011 ZH post "Philly Fed Finds Economic Conditions For Low And Moderate-Income Families Deteriorated Under The "Wealth Effect" Mandate")
We're kind of fond of old Doc Shiller.
In addition to publishing "Irrational Exuberance" in March, 2000 with the NASDAQ hitting its all time closing high of 5048 (subsequent low 1114, how's a 78% decline grab ya?) he is the keeper of the Cowles Commission records. From one of our Forecasting Equity Returns posts:
A subject near and dear to my heart. I may be the only person I've ever met who read every page of "The Cowles Commission's Common Stock Indexes 1871-1937".
[you must be a blast at parties -ed]
Here's his Yale homepage.
And  Irrational Exuberance.
Here's Common Stock Indexes...
....My favorite tidbit is the listing, among the pre-1871 industrials, of New York Guano.
Some things never change.
Here’s Yale’s (and my) gift:
It links to a big ‘ol hog of a PDF.