Richard Thaler may be able to build a “bridge between the economic and psychological analyses of individual decision-making,” as the Royal Swedish Academy of Sciences explained in awarding him the Nobel Prize. And perhaps “his empirical findings and theoretical insights have been instrumental in creating the new and rapidly expanding field of behavioral economics.”
But when it comes to the current state of the stock market, he’s just as confused as anybody else.
‘We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping. I admit to not understanding it.’
That’s what the University of Chicago professor told Bloomberg TV in an interview on Tuesday when asked about the low volatility and continued investor optimism.
“It’s certainly puzzling,” he added. “And it’s puzzles that attract my attention.”
Thaler went on to say that he’s nervous, and when investors seem nervous, “they’re prone to being spooked.”
In a separate interview with Bloomberg, Thaler took a swipe at President Trump in light of what he sees as a doomed attempt to pass tax reform.
“His ratio of certitude to knowledge is nearing record highs,” Thaler said. “We all need a lot of humility, and especially about the economy.”