Question A:
Unless they have inside information, very few investors, if any, can consistently make accurate predictions about whether the price of an individual stock will rise or fall on a given day.
Responses
© 2025. Kent A. Clark Center for Global Markets.
5%
0%
0%
0%
0%
40%
55%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
0%
0%
36%
64%
Question B:
Plausible expectations of future dividends, discounted using a plausible risk-adjusted interest rate, explain well the level of stock prices for recently listed internet businesses in 1999.
Responses
© 2025. Kent A. Clark Center for Global Markets.
5%
5%
28%
48%
15%
0%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
37%
49%
15%
0%
0%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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Experts are generally no better than the rest of us -- often worse.
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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There is short run predictability but consistently on a given day is a high standard.
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 Janet Currie |
Princeton | Bio/Vote History | ||
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 David Cutler |
Harvard | Bio/Vote History | ||
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I suspect 'very few' is an important qualifier.
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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Provided "very few" includes the minority of hedge fund traders who clearly can.
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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Despite attempts, there is no solid empirical evidence or convincing theoretical support for the contrary view.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Randomness is the best ex ante explanation of a given stock's movement on a given day.
-see background information here |
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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 Claudia Goldin |
Harvard | Bio/Vote History | ||
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If even a few could predict that well then there would be little volatility and these "geniuses" would be very rich.
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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We have at least 10,000 research papers establishing this one as a fact
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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 Robert Hall |
Stanford | Bio/Vote History | ||
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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Answer assumes that no public information is unaccounted for, because stock market is closed.
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 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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This is the conclusion of the empirical evidence I have seen.
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Everyone should have to read Ken French's Presidential Address to the American Finance Association on the perils of active investing.
-see background information here |
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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Predictable anomalies are surely a small part of daily variance. Long term predictability seems greater (Campbell-Shiller).
-see background information here |
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 Edward Lazear |
Stanford | Bio/Vote History | ||
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Markets may be far from perfect, but the literature supports that the current price is the best predictor of tomorrow's price.
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 Jonathan Levin |
Stanford | Bio/Vote History | ||
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Hard one to answer - probably depends on interpretation of "very few" and "consistently".
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 William Nordhaus |
Yale | Bio/Vote History | ||
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Tough question because of details. But yes. This is well studied and subject to small, low-yield, and transient anomalies.
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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The evidence supports this claim, though one can't infer that stock prices always equal reasonable forecasts of discounted future dividends.
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 Cecilia Rouse |
Princeton | Bio/Vote History | ||
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The informational requirements are too high given the many factors and random shocks that can occur on any given day.
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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The evidence on this one seems overwhelming.
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 Hyun Song Shin |
Princeton | Bio/Vote History | ||
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 James Stock |
Harvard | Bio/Vote History | ||
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 Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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There may be rare moments when movements of specific stocks are predictable, but these are fleeting and will yield profit to only a few.
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 Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
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Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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We were in a bubble. There were not enough future profits in the world to justify those prices.
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Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Raj Chetty |
Harvard | Bio/Vote History | ||
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Judith Chevalier |
Yale | Bio/Vote History | ||
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The definition of plausibly is part of the issue---
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Janet Currie |
Princeton | Bio/Vote History | ||
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This is not my area of expertise.
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David Cutler |
Harvard | Bio/Vote History | ||
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Ex post events suggest otherwise.
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Angus Deaton |
Princeton | Bio/Vote History | ||
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You mean there was no bubble?
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Expected cash flows were hard to estimate. See Pastor and Veronesi. An ex ante (1999) poll would be very interesting!
-see background information here |
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Are we still arguing over whether the internet bubble was a bubble? I thought it was at the time and have never thought otherwise.
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Claudia Goldin |
Harvard | Bio/Vote History | ||
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The Q is still oddly worded, but appears to ask whether the dot.com bubble was a bubble. I guess I think it was.
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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?
We know that there was a bubble and most of them went out of business.
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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It is always easiest to make these judgments ex post, which of course, undermines their meaning.
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Robert Hall |
Stanford | Bio/Vote History | ||
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Turns on the interpretation of "plausible." My Ely Lecture made the case that eBay's valuation satisfied a plausible discounted div model.
-see background information here |
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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"Plausible" is a fuzzy term. Asset pricing theories concern averages, not events. If a 10-1 horse wins, does that mean the odds were wrong?
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Never could figure out how pets.com, webvan and various other dotcoms could have ever made money.
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Edward Lazear |
Stanford | Bio/Vote History | ||
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In cases where ex post, something turns out to be a bubble, it is tough to say that ex ante expectations were plausible.
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
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Even at the time, it was clear that these firms would have to earn most of GDP to rationalize their stock prices.
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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This episode was a classic case of contagious overoptimism.
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Cecilia Rouse |
Princeton | Bio/Vote History | ||
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This is but one interpretation; a bubble would be another....
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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I haven't seen an analysis of this for dot.coms in aggregate, but many of their valuations were truly nutty.
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Hyun Song Shin |
Princeton | Bio/Vote History | ||
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James Stock |
Harvard | Bio/Vote History | ||
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Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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Asset prices are extremely volatile, and "explaining" this fact as variations in the price of risk seems close to tautological.
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Richard Thaler |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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The key is to define "plausible expectations". It is likely that widespread overconfidence contributed to the price rise.
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Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
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