CAPE Ratio - I

| February 19, 2018
Share |

As I have opined in prior writings, valuations are not catalyst to move the market in either direction.

And no it did not cause the 10% sell-off earlier this month.

The U.S. stock market today has only been this expensive just before the crash of 1929, the tech bubble, and the Global Financial Crisis. This is based on the CAPE Ratio which is the Cyclically-Adjusted P/E ratio developed by Robert Shiller.

In looking at those three specific time periods, it wasn’t “expensive valuations” that caused the crash.

What actually triggered significant stock market declines were material slowdowns in the U.S. economy.

This is why we are so laser focused not on day-over-day market moves or high frequency economic data, but on the RATE OF CHANGE (read as year-over-year) readings.

Finally, remember tops and bottoms are not exact points in time, they are a process.


Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O


Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Meyer Capital Group), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Meyer Capital Group. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Meyer Capital Group is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Meyer Capital Group’s current written disclosure statement discussing our advisory services and fees is available for review upon request.

Share |