When predicting future real returns of stock markets, the cyclically adjusted price/earnings ratio (CAPE) is a good place to start. The formula, first proposed by guru Benjamin Graham, is pretty…
Tag: Shiller P/E
Comparing CAPE 10 with CAPE 5 or 6 -- Market May Not be as Expensive as it Looks
Writing on ETF.com, Larry Swedroe of the BAM Alliance explains that the market looks less overvalued if one uses a period shorter than the commonly used 10-year period in applying…
Diversification & Rock Bottom Valuations In the Third Pillar
Rob Arnott and Christopher Brightman of Research Affiliates recently discussed the allocation and performance of PIMCO All Asset Fund, which goes outside mainstream investments into what they describe as the…
Negative Implications of Falling Corporate Profit Margins
In his MarketWatch column, Mark Hulbert explains the distressing news buried by much of the recent positive reporting on the upward revision of GDP earlier this month. “Though the government’s…
Jeremy Siegel's Critique of the Shiller P/E Ratio and His Market Outlook
Financial Advisor reports on Wharton School of Finance Professor Jeremey Siegel’s comments at the annual Inside ETFs conference, where he critiqued the widely used Shiller P/E Ratio. Siegel did not…
Malkiel Warns of Expensive Market and Lower Future Returns
Burton G. Malkiel, CIO of Weathfront and author of the best selling investment book, “A Random Walk Down Wall Street”, offers advice for investing in an expensive market in the…
Stock Market May Not be as Overvalued as Some Believe
Larry Swedroe of Buckingham (independent member of BAM Alliance) says that stocks are not nearly as overvalued as many leading commentators and analysts suggest. He offers six reasons that, he…
AQR Tests Market Timing Techniques, Helping to Boost Long Term Returns
A recent article by Cliff Asness and colleagues from AQR Capital Management challenges the academic finance recommendation to avoid attempts to time the market. “Sinning a little,” Asness and…
Shiller Voices Concerns Over Market
Prof. Robert Shiller is voicing concerns over multiple factors right now, including the high CAPE ratio (the P/E of the market using 10 years’ worth of earnings) and the increased…
Fisher Says Shiller P/E Not a Helpful Timing Tool
In an interview with Steve Forbes, Kenneth Fisher says that dollar-cost averaging isn’t a smart strategy over the long run, and says the increasingly popular 10-year “Shiller” P/E isn’t a…