Investors, especially institutional investors, believe the stock market is overpriced, according to a survey from Nobel laureate economist Robert Shiller of Yale University.
The survey results are the worst since about 2000, he told CNBC
. "Over the recent years, the decline in confidence in the valuation of the market has been striking."
The S&P 500 index carried a trailing price-earnings ratio of 19.54 Friday, up from 17.80 a year ago, according to Birinyi Associates.
Shiller noted that his cyclically adjusted price-earnings ratio is now 27, with is about the same as in 2007 before the financial crisis.
In addition to his valuation confidence index, Shiller has a market crash confidence index, which measures what investors see as the probability for a crash like 1929. And that's not looking so hot either.
"It's not a dramatic drop, but there's a drop in confidence that we won't have a 1929-style crash," Shiller said. In other words, worries are increasing that there will be a crash.
"I don't want to make too much of that. That number has wiggled around. But it is down," he said.
"I've been wondering if I should pull out [of the stock market]. But I have not. In fact, I'm still thinking even at the ratio of 2007 the expected return is still higher than you expect to get on housing, real estate, or fixed incomes."
The S&P 500 index and Dow Jones Industrial Average hit record highs Friday.
, chief investment strategist of money management firm GMO, is one who does see a crash coming.
"I am still a believer that the Fed will engineer a fully fledged bubble (S&P 500 over 2,250) before a very serious decline," he wrote in his latest quarterly commentary.
The market has an "obvious overvaluation," Grantham noted.
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