Much has been made lately about how the CAPE ratio — a popular valuation measure applied to the S&P 500 SPX — has ballooned to levels not seen since the dot-com bubble, and before that, all the way back to 1929.
CAPE stands for cyclically adjusted price-to-earnings. It’s also known as the Shiller P/E ratio, named for the Yale professor who created it. While the metric has its share of critics, it’s still considered a standard measurement of market valuation.
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