Imagine this. You are a private banker, in a meeting with an important client. You have asked Bob, the economist, to come along, to update the client with the latest views on the economy. And here is what Bob says:
After rapidly wrapping up the meeting, you face Bob in the elevator:
What’s the matter with you, Bob? What the hell were you talking about? So are we going to have a recession, yes or no? I mean, I take you along ’cause you’re the expert, and what do you say? There is always a chance of another recession… It’s hard to say, we don’t have any clear sense of timing… C’mon, Bob, you can’t be serious!
This is another of Robert Shiller‘s most admirable qualities: not for him to play the overconfidence tricks of TV talking heads.
There is no better definition of overconfidence than one of the top tips apparently dished out to Harvard Business School students (Quiet, p. 47):
“Speak with conviction. Even if you believe something only fifty-five percent, say it as if you believe it a hundred percent”.
Professor Shiller will warn you about the dot-com bubble, the real estate bubble, and proceed to win the Nobel Prize. But never put him in front of a client.