US S&P 500 equity market CAPE Ratio at 10 Year High. Now what does that mean?
“The cyclically adjusted price-to-earnings ratio, commonly known as CAPE, Shiller P/E, or P/E 10 ratio, is a valuation measure usually applied to the US S&P 500 equity market. It is defined as price divided by the average of ten years of earnings (moving average), adjusted for inflation.”
The Cyclically Adjusted Price-Earnings (CAPE) ratio was developed by Dr. Robert Shiller (who won the Nobel Prize for his work on 10/14/2013)
Here are Robert shiller’s views of stock valuations right now via CNBC. He also said the CAPE ratio is “at the point where stocks look like over the long-haul, over the next 10 years, they might underperform 10-year treasuries.”