Nobel Prize winner 'nervous' about surging US stock market
“We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,” said Thaler, who received the prize for contributions to behavioral economics.
“And I admit to not understanding it,” the professor told Bloomberg.
Since the US presidential election in November 2016 the S&P 500 index of America's biggest corporations has repeatedly beaten its own records.
“It just crawls up slowly but surely. And if it’s all based on expectation on some big tax cuts surely investors should have lost confidence that that was going to happen given what’s happened so far out of Congress,” the economist said.
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Thaler expressed concerns over the low volatility and continued optimism among investors.
“I don’t know about you but I’m nervous, and it seems like when investors are nervous they are prone to being spooked and nothing seems to spook the market,” he said.
“I think the minuscule volatility in the stock market, not that I have an explanation for it, but it is certainly puzzling, and it’s puzzles that always attract my attention,” Thaler said.
“Psychologists have long talked about animals either freezing or running, and it seems like investors are in freeze mode,” he added.