9/18/2023 0 Comments Robert shiller data![]() ![]() Both statistics represent yields, meaning that higher results are better and lower ones worse.Īt any rate, the following chart tells the same story as its predecessor, except in reverse. Doing so places the CAPE ratio on the same footing as ECYs. For the moment, the next step is to invert the previous chart, by depicting not the CAPE ratio-that is, stock prices divided by earnings-but instead the CAPE ratio yield, which measures earnings divided by stock prices. Although I still believe that claim to be correct, today’s column will provide another justification for a higher CAPE ratio.Īll in due time. Equity valuations have therefore increased. ![]() Last week’s article argued that only the recent history was relevant because, over time, investors have re-evaluated stocks, perceiving them as less risky than they did in the distant past. By this account, stocks are costly by historic standards but near their typical level over the past three decades. ![]()
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