- Hardcover: 392 pages
- Publisher: Princeton University Press; Revised and Expanded Third edition (January 25, 2015)
- Language: English
- ISBN-10: 0691166269
- ISBN-13: 978-0691166261
- Product Dimensions: 6.3 x 1.3 x 9.3 inches
- Shipping Weight: 1.5 pounds (View shipping rates and policies)
- Average Customer Review: 226 customer reviews
- Amazon Best Sellers Rank: #29,246 in Books (See Top 100 in Books)
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Irrational Exuberance 3rd edition Revised and Expanded Third Edition
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Robert J. Shiller, Co-Winner of the 2013 Nobel Prize in Economics
A New York Times Bestseller
Winner of the 2000 Commonfund Prize for the Best Contribution to Endowment Management Research
"Robert J. Shiller . . . has done more than any other economist of his generation to document the less rational aspects of financial markets."--Paul Krugman, New York Times
"Irrational Exuberance is not just a prophecy of doom. . . . [I]t is a serious attempt to explain how speculative bubbles come about and how they sustain themselves."--John Cassidy, New Yorker
"What set off this speculation and what feeds it? Shiller ranges widely his explanations, laying them out in the first 168 pages in easy-to-read, sometimes passionate prose. . . . [T]hose first 168 pages are must reading for anyone with savings invested in stocks."--Louis Uchitelle, New York Times Book Review
"Mr. Shiller's book offers a dose of realism. . . . [I]t presents a message investors would be wise to head: Make sure your portfolio is adequately diversified. Save more and don't count on double-digit gains of the past decades continuing to bail you out during retirement."--Burton G. Malkiel, Wall Street Journal
"Informative and well-argued . . . A calm and reasonable antidote to today's euphoria."--Jeff Madrick, New York Review of Books
"Although its message may be unwelcome to many, this important book should be read by anyone interested in economics or the stock markets."--Rene M. Stulz, Science
"Dazzling, richly textured, provocative . . By far the most important book about the stock market since Jeremy J. Siegel's Stocks for the Long Run."--William Wolman, Business Week
"Shiller has provided an accessible guide to the usually impenetrable literature on financial markets, especially the American stock market."--Foreign Affairs
"Shiller contends that investor psychology is so given to herd behavior that it's almost impossible to manipulate or even influence. The market can 'go through significant mispricing lasting years or even decades.'"--Robert J. Samuelson, Washington Post
"Irrational Exuberance should be compulsory reading for anybody interested in Wall Street or financially exposed to it; at the moment, that would be roughly everybody in the United States."--Economist
"[An] excellent new book. . . . If you want to preserve capital, unload most of your stocks and invest in government bonds."--Steve H. Hanke, Forbes
"Likely to be the year's most-talked-about finance book. . . . You can agree or disagree with it. But you owe it to yourself to read it if you are investing in equities or contemplating doing so."--Fred Barbash, International Herald Tribune
"Irrational Exuberance is likely to cause a stir. . . . Shiller illustrates how the current market is like a naturally occurring Ponzi scheme in which investors become promoters for the game after receiving initial payments with money taken from subsequent investors."--David Henry, USA Today
"Irrational Exuberance is not billed as a personal finance book. But it is. You can agree or disagree with it. But you owe it to yourself to read it if you're investing, or contemplating investing, in inequities."--The Washington Post
"A must-read . . . Refreshing, well-reasoned . . . And very readable."--Michael P. Niemira, Barron's
"So why have share prices soared so high in the past five years, taking market valuations past all historical records? Professor Shiller's answer, as the title indicates, is not encouraging. His message is: diversify now as much as you can, and batten down the hatches."--Diane Coyle, Independent
"Shiller has written a crystal-clear and tough-minded critique."--David Warsh, Boston Globe
"The point of Irrational Exuberance is not to help investors dump their houses before the current exuberance fades. It is to deepen our understanding of the events we are watching as one bubble gives birth to another and to encourage readers to think about economic behavior and economic policies that can cushion the nasty side of volatility."--Sharon Reier, The International Herald Tribune
"The first edition of this book was widely read because of its timing. This one, too, seems perfectly timed, coming when we're starting to fear we've been fooling ourselves. Again. . . . There's a world of important information for everyone."--Lyn Miller, USA Today
"The second edition's new component . . . is Shiller's exploration of how market psychology has responded to the ensuing five years of retrenchment. One chilling conclusion he reaches from his knowledge of past market performance is that the 2005 market may still be correcting and that a return to 2000 levels may be a decade away. He further warns that many investors are still too heavily invested in equities and that proposals to invest Social Security funds in the stock market would subject the retirement system to unacceptable risk. Shiller expands his focus to include the booming real estate market where he sees another speculative bubble building."--Library Journal
"There's plenty of new material in this edition. . . . Chief among the new additions is Shiller's deeper focus on recent excesses in the stock market and his skepticism about investing in real estate. . . . . Shiller's ideas have so many devoted followers that I wouldn't be surprised to see many more editions."--Angele McQuade, BetterInvesting
"Yale University Professor Robert Shiller pretty much called the stock market drop when this book was first published in 2000. In this fact-packed book, Shiller describes the psychological origins of volatility, among other things. And in the newest edition, Shiller compares the recent housing boom to the stock market bubble of the 1990s."--Registered Rep.
"[Shiller] fully updates his argument here, adding new material (a chapter on the bond market, his 2013 Nobel lecture) and augmenting the text to reflect developments since the 2005 second edition. He vacuums up all manner of cultural phenomena, from the important (rising income inequality) to the possibly significant (Google Glass) to the trivial (Kim Kardashian), to reinforce his thesis, and he writes expressively, whether explaining arcane economic issues or illustrating how the story behind Mona Lisa's smile helps account for the painting's astonishing market value. A rare example of economic analysis, deeply respected within the discipline, wholly accessible to general readers."--Kirkus
"A superb, well-written, well-argued contribution for serious scholars and practitioners, whether they agree with Shiller or not."--Choice
"Shiller provides an excellent synthesis of all the evidence contradicting the efficient market hypothesis, especially how a form of irrational exuberance sometimes leads to price bubbles. . . . Without any doubt, Irrational Exuberance must be read by anyone interested in finance. And it really can be read by anyone interested in finance because the genius of this book is to explain complex phenomena easily, avoiding specialist jargon, including mathematics."--David Le Bris, Journal of Economics
About the Author
Robert J. Shiller, the recipient of the 2013 Nobel Prize in economics, is a bestselling author, a regular contributor to the Economic View column of the New York Times, and a professor of economics at Yale University. For more information, please go to www.irrationalexuberance.com.
Top customer reviews
Will history repeat itself with this third volume? That is hard to say. In this latest edition, Professor Shiller updates his argument, and augments the text to reflect developments since the 2005 second edition. Of particular interest, he adds an important new chapter on the bond market, which many feel is also in bubble territory. The good news is that, while Professor Shiller says that returns in all asset classes are likely to be subpar for some years given today's elevated asset prices, the mood is less somber than in previous editions, and there are no warnings of imminent doom, as in previous editions. In particular, he does not see a classic "bubble" in bonds, due to the lack of "exuberance" -- prices for bonds are being bid up reluctantly by investors, he says, which is not the formula for a bubble. However, he certainly balances that somewhat comforting news with a realistic view of the risks that the current situation presents to investors and savers of all types, stocks, bonds, housing, and savings accounts. His main piece of advice to all Americans concerned about their financial future may be the most sensible piece of financial advice ever written: spend less, save more! Yes, we all know that, but when the winner of the 2013 Nobel prize says that, it really means something.
I find Professor Shiller's writing style highly enjoyable, not at all like most economics books. The plain-spoken style is smart, wry, and often witty, and there are almost no mathematical formulas, except in the occasional technical notes in back. The book also talks about a lot of factors that are intrinsically interesting to non-economists. For example, it has chapters devoted cultural factors in investing; the effects of the news media; "new era" economic thinking; psychological factors; psychological anchors for the market and herd behavior.
Professor Shiller ends by offering a lot of good, commonsense advice to both policymakers and investors, large and small. I highly recommend this book to anyone who wants to understand what's behind the current anxiety, turmoil, and hopes, for a brighter financial future for all Americans.
Shiller, undaunted by the rising market which, in this reviewer’s opinion, only strengthened his case, published the first edition of Irrational Exuberance in March 2000, at the very peak of the greatest bull market in history. Having already gained some appreciation for Shiller’s originality, objectivity and rationality, I read the book immediately. Shiller was right – and for the right reasons. Without question, it was the most prescient book on the likely endgame of that era.
When the second edition appeared in 2005, it included an extensive discussion of a pricing anomaly in residential real estate. Shiller effectively identified the crossover between real estate, the capital markets, mortgage securitizations, and the myriad individual and group psychological forces, amplified by feedback loops, which made the combination an explosive mixture. Two years later it burst and became known as the financial crisis. Once again, Shiller was on point.
That brings us up to the moment. It has been exactly three weeks since the third edition was released on January 25. Presumably a respectable sample from which one can make broad generalizations, the Kindle “popular highlights” feature indicates that there are six on page 15 and none beyond. What is certain is that there are only four reviews to date.
Unfazed by the absence of instant acclaim for the third edition of Irrational Exuberance – an outcome that is perfectly consistent with what Robert Shiller communicates to the attentive reader – I have no doubt that this book’s eventual Oscar performance will complete the trifecta.
Lastly, although you can read all about it in the book, I commend to anyone perusing this review the visceral experience of watching Robert Shiller’s 2013 Nobel prize acceptance speech on YouTube. The youngish behavioral finance revolution of which Shiller is at the vanguard, originated from a simple observation: The efficient market hypothesis was good in theory but not so good in practice. Shiller and others turned to the softer sciences of psychology and sociology to find an answer. Irrational Exuberance is a seminal work in the field of behavioral finance.
Frank K. Martin, author of A Decade of Delusions and Speculative Contagion