1Q24 Global Valuations

Readers,

Here are the global valuations as of March 31, 2024. There are charts after the table below.

Quarterly CAPE Ratio Updates

Median CAPE Ratio: 16
25% cheapest: 11
25% most expensive: 27

Average of Foreign Developed: 20
Average of Foreign Emerging: 15

We've mentioned this note in every update but it bears repeating. We use the MSCI Investable Market Indices (IMI) below, but MSCI also calculates their Standard Indices too. IMI includes more companies and in general, is more representative of the entire market. It makes no difference for any countries except the very smallest ones, such as Greece and Egypt. For both series, the CAPE ratios are almost always near identical.

So, this is one reason we have always used a valuation composite across the variables below. If one is giving a screwy result, or perhaps a market has a structural bias to one variable, we want to average it out.

Since we get asked this question a lot, in addition to The Idea Farm, here are a few great free resources for global stock market valuations...

1. Research Affiliates
2. Barclays
3. Professor Shiller
4. Professors French & Fama
5. Professor Damodaran

A few great paid choices include Global Financial Data and Ned Davis Research. Let us know if we're missing any!

• *Abbreviations:
  CAPE: Cyclically Adjusted Price Earnings - a valuation measure that uses real earnings per share (EPS) over a 10-year period to smooth out fluctuations in corporate profits that occur over different periods of a business cycle.
  CAPD: Cyclically Adjusted Price Dividends - a valuation measure that uses dividends over a 10-year period to smooth out fluctuations in corporate profits that occur over different periods of a business cycle.
  CAPCF: Cyclically Adjusted Price Cash Flow - a valuation measure that uses cash flow over a 10-year period to smooth out fluctuations in corporate profits that occur over different periods of a business cycle.
  CAPB: Cyclically Adjusted Price Book - a valuation measure that uses book value over a 10-year period to smooth out fluctuations in corporate profits that occur over different periods of a business cycle.