The prophet of bubbles and the power of process

Do you remember the late 1990s? What a crazy time in the equity markets, in India and globally. Tech stocks seemed to mint new billionaires weekly, and the prevailing wisdom was that traditional market metrics no longer mattered. Any number of companies were pretending to be tech, a trick still being played on investors. 'This time it's different,' almost everyone said, as the indexes soared to new highs daily. But one economist, Robert Shiller of Yale, saw through the mania. His research had (re-)revealed something that should never have been forgotten: markets aren't driven purely by logic but by the stories we tell and believe. When these narratives become divorced from reality, bubbles form. History vindicated Shiller spectacularly. The subsequent dot-com crash wiped out $5 trillion in wealth, with the NASDAQ losing 78 per cent of its value by October 2002. In India, the Sensex fell by 56 per cent at the time. But Shiller wasn't done. In 2005, he warned of a housing bubble, only to be