Dr. Shilling: It was a very lucky year for us. In January of each year in our monthly newsletter Insight, we publish our investment strategies for the year. In January 2008, our lists stretched to 13 and all 13 worked. That's highly unusual, but all 13 actually performed and if you were to consider that on a strictly random basis, if you said what are the odds of flipping a coin and getting heads 13 times out of 13, it's 1 in 8,192. So I would like to think there is something other than just random luck involved. But it was a good year. We had forecast that stocks would be down, the dollar would be strong, that emerging market debt and equities would decline, that housing prices would fall along with housing-related stocks. So you go right down the list and they all worked.
TWST: Consumer retrenchment?
Dr. Shilling: Consumer retrenchment, absolutely. Yes, that was a big item too
and obviously, all the retailers were very negatively affected as were
producers. You look at what happened to the auto industry - that's a very clear
big, postponable item and between the end of the SUV pickup truck fad and people
deciding they can run their own cars for another six months or a year, that
industry collapsed and that, of course, was the death knell for both Chrysler
and GM.
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