Shiller CAPE Tops 41, Marking Stock Market's Second-Richest Level in 150 Years
Updated
Updated · Yahoo Finance · Aug 30
Shiller CAPE Tops 41, Marking Stock Market's Second-Richest Level in 150 Years
3 articles · Updated · Yahoo Finance · Aug 30
Summary
The Shiller CAPE ratio has climbed above 41, putting the U.S. stock market at its second-highest valuation on record and far above its roughly 18 average since the 1880s.
That measure uses 10 years of inflation-adjusted earnings to smooth boom-and-bust years, and its current reading also stands well above the past 30-year average of about 29.
Such elevated valuations do not mean every stock is overpriced, but they often coincide with speculative periods in which future growth expectations leave little room for earnings disappointments.
The closest historical parallel is the dot-com era, when the CAPE rose above 44; after the Fed raised rates six times across 1999 and 2000, the Nasdaq eventually sank 78% from its March 2000 peak.