Global Valuation Updates!
Quarterly CAPE Ratio Updates
Well the first quarter of the decade certainly altered the landscape…
Median CAPE Ratio: 12 (was 17)
25% cheapest 9 (was 12)
25% most expensive: 22 (was 28 (U.S. in this bucket))
Average of Foreign Developed: 17 (was 22)
Average of Foreign Emerging 11 (was 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, with one glaring exception – again, Greece, which depending on the series you use has a CAPE ratio of -2 or 4.
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.
We’ll also be adding CAPS (sales) to the update this summer!
The cheap stuff is still dominated by Europe…but everything got a lot cheaper in Q1…
| CAPE | CAPD | CAPCF | CAPB | Average Rank | Dev or Emerging | Real Drawdown % | |
| Czech Republic | 7.1 | 8.3 | 3.1 | 0.8 | 2 | E | -58.28 |
| Poland | 7.4 | 17.7 | 3.4 | 0.8 | 4 | E | -58.39 |
| Russia | 5.9 | 22.7 | 3.7 | 0.8 | 6 | E | -70.69 |
| Spain | 10.6 | 14.4 | 4.7 | 0.9 | 7 | D | -42.49 |
| Turkey | 6.4 | 21.6 | 5 | 0.9 | 8 | E | -62.75 |
| Egypt | 9.5 | 20.7 | 5 | 1 | 9 | E | -73.84 |
| Colombia | 10 | 19.3 | 6.2 | 0.9 | 9 | E | -49.65 |
| Austria | 10.3 | 25 | 4.2 | 0.8 | 10 | D | -61.2 |
| Chile | 10.2 | 21.6 | 5.8 | 1 | 11 | E | -54.98 |
| Greece | -1.8 | 11.8 | 2.1 | 0.2 | 12 | E | -97.65 |
| Portugal | 14.6 | 17.1 | 4.4 | 1.1 | 13 | D | -60.14 |
| Italy | 15 | 22.6 | 4.3 | 0.8 | 14 | D | -52.93 |
| Singapore | 10.6 | 20.5 | 8.2 | 1 | 14 | D | -25.5 |
| Norway | 12.2 | 21.6 | 5.6 | 1.3 | 16 | D | -28.7 |
| Brazil | 11.9 | 22.4 | 7.1 | 1.3 | 17 | E | -39.24 |
| U.K. | 12.1 | 21.2 | 6.8 | 1.4 | 17 | D | -26.75 |
| Korea | 10.2 | 57.9 | 5.5 | 1 | 18 | D | -29.33 |
| Hungary | 11.5 | 44 | 4.7 | 1.3 | 19 | E | -34.11 |
| Malaysia | 12 | 24.2 | 7.8 | 1.3 | 19 | E | -26.41 |
| Thailand | 11.7 | 24.6 | 7.1 | 1.5 | 20 | E | -40.5 |
| Hong Kong | 12 | 29.1 | 8.9 | 1.1 | 22 | D | -27.21 |
| Germany | 13.7 | 30.2 | 6.9 | 1.4 | 23 | D | -30.22 |
| Indonesia | 11.9 | 28.7 | 7.9 | 1.8 | 24 | E | -40.03 |
| South Africa | 12.8 | 23.5 | 8.4 | 1.6 | 24 | E | -37.88 |
| Australia | 14.4 | 19.7 | 9.8 | 1.6 | 25 | D | -29.22 |
| Mexico | 13.8 | 36.1 | 6.7 | 1.6 | 26 | E | -36.24 |
| France | 16.4 | 29 | 8.4 | 1.4 | 26 | D | -28.03 |
| Philippines | 12.2 | 37.7 | 8 | 1.6 | 27 | E | -58.02 |
| Israel | 13.1 | 33.9 | 8.6 | 1.4 | 27 | D | -25.54 |
| Peru | 10.8 | 31.2 | 10.3 | 1.7 | 27 | E | -48.19 |
| Canada | 16.7 | 29.7 | 8.5 | 1.5 | 28 | D | -25.59 |
| Belgium | 16.9 | 27.3 | 9.8 | 1.5 | 29 | D | -32.81 |
| Japan | 17.3 | 51.3 | 8.2 | 1.3 | 30 | D | -22.94 |
| China | 12.2 | 39.5 | 9 | 1.6 | 30 | E | -28.27 |
| Taiwan | 17.3 | 29.2 | 9.3 | 1.8 | 32 | E | -19.99 |
| Finland | 18.5 | 23.7 | 10.4 | 1.9 | 32 | D | -55.63 |
| Sweden | 17.7 | 32.4 | 12.7 | 2.3 | 37 | D | -23.98 |
| India | 16.2 | 62.2 | 10.5 | 2.2 | 37 | E | -44.07 |
| Netherlands | 20.4 | 42.4 | 12.6 | 2.1 | 38 | D | -24.49 |
| New Zealand | 25.5 | 32.2 | 13.5 | 2.5 | 38 | D | -17.81 |
| Switzerland | 23.1 | 38.1 | 17.2 | 2.9 | 40 | D | -16.85 |
| Ireland | 34.6 | 58.5 | 13.5 | 1.8 | 40 | D | -42.02 |
| U.S. | 23.7 | 59.5 | 14.3 | 3.1 | 42 | D | -25.03 |
| Denmark | 30.1 | 73.1 | 19.3 | 4.1 | 44 | D | -16.28 |
Good investing,
Meb Faber
theideafarm.com