Stock market bubble warnings grow louder

Bubble - Photo by Jeff Kubina

Some of the brightest minds in finance are sounding the alarm about a stock market bubble.

They aren’t warning of an imminent crash, but their comments should remind investors that the current bull market — over five years long — can’t last forever.

1. Nobel Prize-winning economist Robert Shiller: Valuations at “worrisome” levels.

“The United States stock market looks very expensive right now,” Robert Shiller wrote in a recent column for The New York Times.

Shiller, a Yale University professor who is often cited as one of the most influential people in economics and finance in the world, created a metric that compares stock prices with corporate profits. The metric recently climbed above 25. That level has only been surpassed three times since 1881: 1929, 1999 and 2007.

Steep market tumbles followed each instance, including the bursting of the dotcom bubble in the early 2000s. The Nasdaq still hasn’t fully recovered from that meltdown.

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