Global Valuation Updates!

Quarterly CAPE Ratio Updates

Median CAPE Ratio: 1825% cheapest: 1225% most expensive: 32

Average of Foreign Developed: 24Average of Foreign Emerging 16

We’ve mentioned this note in every update but bears repeating.  We use the MSCI Investable Market Indices below, but MSCI also calculates their Standard Indices too.  IMI includes more companies and in general is more representative of the entire market.  It really makes no difference for any of the 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.  So, in this case Greece is cheap on other metrics just not on CAPE.

Good investing,Meb