1% return over inflation over 200 years is DAMN GOOD

What better investment can you find than this?

This is consistent return over 200 years! And it's 1% over inflation rate. Let's say inflation rate is on average 2%, you get 3% for 200 years. Shiller made couple of fatal mistakes:

1) It makes zero sense to calculate the rate over 200 years. Because most houses don't exist beyond 130 years, let alone 200 years. These old houses will get bulldozed and on the same site, people will build a new one. US history is not longer than 200 years. The society 200 years ago was completely different from that today. People at that time used different money. US has not fully established. The valuation system of 200 years ago is completely different from today's standard. Mr. Shiller must be joking to make that kind of irrelevant comparison.

2) Mr. Shiller lumped 50 states and most townships in the US including 80% of rural areas where housing values never change much. Most of the house price changes happened in the major metro regions like SFC, NYC or Wash DC or LA. If you include Kansas or Ohio or North Dakota, then the data Mr. Shiller obtained will make no practical sense any more. NYC's house price has increased 1000 folds over the past 100 years. Same happened to San Francisco. But Mr. Shiller averaged it out with all the data from rural areas and the rest of no-growth states. Of course, he reached that useless number: 1% rise over inflation. Even if that number is laughably sensless, but it's still a pretty damn good number. Over the past 100 years, Kansas city only rose 10 folds in price, but NYC has risen 1000 folds. I guess Mr. Shiller never cared about this fact. That's why few PhDs make money because they spent their waking ours cranking out useless statistics.

Remember, Mr. Shiller predicted housing crash as early as 2000. Isn't he a joke?

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• When did he say "crash as early as 2000"? -GD2- ♂ (134 bytes) () 07/08/2006 postreply 17:48:37