Global Valuations

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: 16.525% most expensive: 25 (U.S. in this bucket)25% cheapest 11

Average of Foreign Developed 19Average of Foreign Emerging 15

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 -10 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 dominated by Europe…

Here it is in Excel too.

MSCI Investable Market Indices 

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