Global Valuations

Sorry about the delays, our data provider lost one of the countries….so here we go again…

Quarterly CAPE Ratio Updates!

After a great year of performance in 2016, many cheap countries are continuing to outperform.

Right to the stats!

Median CAPE Ratio: 17.825% most expensive: 26.5 (U.S. in this bucket)25% cheapest 12.3

Average of Foreign Developed 20.8Average of Foreign Emerging 16.3

We’ve mentioned this a lot in the past 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, with one glaring exception – again, Greece, which depending on the series you use has a CAPE ratio of -7 or 2.  Ha.

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 cheapest on CAPD, CAPB, and CAPCF, just not on CAPE.

The cheap stuff is still dominated by Europe…

Here it is in Excel too.

MSCI Investable Market Indices

SECTORS

Get a Free Subscription!

If you send me an email with a link or attachment to a piece you think readers would love, and I use the piece, I will happily give you $100 off your subscription.  This is worth a free quarter of the Farm at current levels.

Send all emails to [email protected] with “RESEARCH” in the subject line.