{"id":13749,"date":"2014-10-18T07:36:08","date_gmt":"2014-10-18T07:36:08","guid":{"rendered":"http:\/\/researchandinvestment.com\/?p=839"},"modified":"2014-10-18T07:36:08","modified_gmt":"2014-10-18T07:36:08","slug":"robert-shillers-cape","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2014\/10\/18\/robert-shillers-cape\/","title":{"rendered":"Robert Shiller&#8217;s CAPE"},"content":{"rendered":"<p>I have long held the view that using Robert Shiller&#8217;s CAPE to determine whether stocks are under- or over-priced is misleading. Average levels for CAPE have shifted over time, and one cannot rely solely on historic highs and lows as a measure of whether the market is over-bought or over-sold.<\/p>\n<p>So I was interested to learn that Robert Shiller currently maintains 50% of his investment portfolio in stocks. From an <a href=\"http:\/\/blogs.wsj.com\/moneybeat\/2014\/10\/10\/robert-shiller-on-what-to-watch-in-this-wild-market\/\">interview with Jason Zweig at WSJ<\/a>:<\/p>\n<blockquote><p>Today&#8217;s level &#8220;might be high relative to history,&#8221; Prof. Shiller says, &#8220;but how do we know that history hasn&#8217;t changed?&#8221; So, he says, CAPE &#8220;has more probability of predicting actual declines or dramatic increases&#8221; when the measure is at an &#8220;extreme high or extreme low.&#8221; &#8230;.Today&#8217;s level, Prof. Shiller argues, isn&#8217;t extreme enough to justify a strong conclusion. So, he says, he and his wife still have about 50% of their portfolio in stocks.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>I have long held the view that using Robert Shiller&#8217;s CAPE to determine whether stocks are under- or over-priced is misleading. Average levels for CAPE have shifted over time, and one cannot rely solely on historic highs and lows as a measure of whether the market is over-bought or over-sold. So I was interested to &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2014\/10\/18\/robert-shillers-cape\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Robert Shiller&#8217;s CAPE&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[18,57],"tags":[567,1835,2979],"class_list":["post-13749","post","type-post","status-publish","format-standard","hentry","category-market-insights","category-stock-markets","tag-cape","tag-inflation-adjusted-long-term-price-earnings-ratio","tag-robert-shiller"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Robert Shiller&#039;s CAPE - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Robert Shiller&#039;s CAPE - the patient investor\" \/>\n<meta property=\"og:description\" content=\"I have long held the view that using Robert Shiller&#8217;s CAPE to determine whether stocks are under- or over-priced is misleading. Average levels for CAPE have shifted over time, and one cannot rely solely on historic highs and lows as a measure of whether the market is over-bought or over-sold. 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Stock market pricing indicates whether stocks are cheap or expensive relative to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks\u2026","rel":"","context":"In &quot;US &amp; Canada&quot;","block_context":{"text":"US &amp; Canada","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/us-canada-countries-regions\/"},"img":{"alt_text":"Bull\/Bear Market Indicator","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":62079,"url":"https:\/\/thepatientinvestor.com\/index.php\/2025\/06\/28\/us-market-leading-indicators-6\/","url_meta":{"origin":13749,"position":2},"title":"US Market Leading Indicators","author":"Colin Twiggs","date":"June 28, 2025","format":false,"excerpt":"The gauge on the left indicates bull or bear market status, while the right reflects stock market drawdown risk. Bull\/Bear Market The Bull\/Bear indicator remains at 60%, with two of five leading indicators signaling risk-off: Weekly continued claims increased to 1.974 million on June 14, warning that the labor market\u2026","rel":"","context":"In &quot;US &amp; Canada&quot;","block_context":{"text":"US &amp; Canada","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/us-canada-countries-regions\/"},"img":{"alt_text":"Bull\/Bear Market Indicator","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-05-09-us-bull-bear-gauge.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-05-09-us-bull-bear-gauge.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-05-09-us-bull-bear-gauge.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":62791,"url":"https:\/\/thepatientinvestor.com\/index.php\/2025\/10\/18\/us-pricing-continues-extreme\/","url_meta":{"origin":13749,"position":3},"title":"US Stock Pricing at Extreme","author":"Colin Twiggs","date":"October 18, 2025","format":false,"excerpt":"The gauge on the left indicates bull or bear market status, and the one on the right reflects stock market valuation levels. Stock market pricing indicates whether stocks are cheap or expensive relative to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks\u2026","rel":"","context":"In &quot;US &amp; Canada&quot;","block_context":{"text":"US &amp; Canada","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/us-canada-countries-regions\/"},"img":{"alt_text":"Bull\/Bear Market Indicator","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":62286,"url":"https:\/\/thepatientinvestor.com\/index.php\/2025\/08\/16\/us-leading-indicators-2\/","url_meta":{"origin":13749,"position":4},"title":"US Leading Indicators","author":"Colin Twiggs","date":"August 16, 2025","format":false,"excerpt":"The gauge on the left indicates bull or bear market status, and the one on the right reflects stock market drawdown risk. Bull\/Bear Market The Bull\/Bear indicator remains at 40%, warning of a bear market ahead. The Chicago Fed National Financial Conditions Index declined to -0.54, indicating easy monetary conditions\u2026","rel":"","context":"In &quot;US &amp; Canada&quot;","block_context":{"text":"US &amp; Canada","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/us-canada-countries-regions\/"},"img":{"alt_text":"Bull\/Bear Market Indicator","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":63423,"url":"https:\/\/thepatientinvestor.com\/index.php\/2025\/12\/27\/us-market-snapshot-4\/","url_meta":{"origin":13749,"position":5},"title":"US Market Snapshot","author":"Colin Twiggs","date":"December 27, 2025","format":false,"excerpt":"The gauge on the left indicates whether the market is in a bull or bear phase, and the indicator on the right reflects the current stock market valuation. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market\u2026","rel":"","context":"In &quot;US &amp; Canada&quot;","block_context":{"text":"US &amp; Canada","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/us-canada-countries-regions\/"},"img":{"alt_text":"Bull\/Bear Market Indicator","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-06-us-bull-bear-gauge.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/13749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=13749"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/13749\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=13749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=13749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=13749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}