Global Valuation Updates!

Quarterly CAPE Ratio Updates

Quite a year so far. Below I thought we’d report the summary CAPEs with year end 2019, end of Q1, then end of Q2 (current).

Median CAPE Ratio: 17, 12, 13 (now)
25% cheapest: 12, 9, 10
25% most expensive: 28, 22, 24

Average of Foreign Developed: 22, 17, 18
Average of Foreign Emerging 16, 11, 12

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 other metrics just not on CAPE.

Here it is in Excel too.

CAPE CAPD CAPCF CAPB Average Rank Dev or Emerging Real Drawdown %
Czech Republic 7.9 9.3 3.5 0.9 2 E -51.18
Poland 8.2 19.5 3.8 0.9 4 E -51.24
Russia 6.2 23.7 3.9 0.8 5 E -68.31
Spain 10.9 14.9 4.9 1 7 D -37.35
Colombia 10.1 19.5 6.3 0.9 8 E -49.25
Turkey 7.1 24.1 5.6 1 9 E -53.76
Egypt 10.4 22.7 5.5 1.1 9 E -70.86
Austria 11.4 27.9 4.7 0.9 11 D -56.19
Greece -1.9 13.3 2.4 0.3 12 E -97.29
Italy 15.5 23.4 4.4 0.9 12 D -46.12
Portugal 15.2 17.7 4.5 1.2 13 D -56.4
Chile 11.6 24.4 6.6 1.1 14 E -49.17
Singapore 11.4 22.1 8.9 1.1 14 D -17.89
U.K. 12.6 22.1 7.1 1.6 15 D -19.67
Norway 13.3 23.5 6.1 1.4 16 D -21.29
Korea 11.2 63 6 1.1 18 D -14.91
Malaysia 12.8 25.8 8.3 1.4 18 E -12.07
Hungary 12 46.1 4.9 1.3 19 E -27.51
Brazil 13.1 24.7 7.8 1.7 19 E -19.86
Hong Kong 12.8 31.1 9.5 1.1 21 D -20.21
Indonesia 12.2 29.2 8.1 1.9 23 E -34.5
Thailand 13.6 28.4 8.3 1.8 24 E -26.75
Germany 14.9 33.1 7.5 1.7 24 D -14.32
Peru 11.4 32.8 10.9 1.7 25 E -42.99
France 17.1 30.4 8.8 1.6 25 D -18.06
Mexico 14.6 38 7.1 1.8 26 E -30.07
Philippines 13.1 40.7 8.6 1.7 26 E -50.88
Israel 14.4 37.2 9.4 1.6 26 D -15.32
Australia 15.6 21.3 10.6 1.9 26 D -17.63
South Africa 14.7 26.9 9.6 1.8 26 E -22.84
Japan 17.8 53.3 8.5 1.4 28 D -13.63
Belgium 18 29.1 10.4 1.7 28 D -25.03
China 13.1 42.5 9.7 1.8 30 E -14.93
Canada 18.6 33.1 9.5 1.8 30 D -11.08
Finland 20.3 26.2 11.4 2.2 32 D -46.79
Taiwan 19.5 33 10.5 2.1 33 E -2.97
Sweden 19 35 13.6 2.6 36 D -11.43
India 18.7 71.6 12.1 2.5 38 E -32.08
New Zealand 27.1 34.4 14.5 2.9 38 D -4.58
Netherlands 22 45.9 13.6 2.5 38 D -8.58
Switzerland 23.9 39.5 17.8 3.1 40 D -8.11
Ireland 36.2 63.6 14.6 2.1 40 D -31.35
U.S. 26.7 67 16.1 3.8 42 D -7.65
Denmark 32.7 79.3 21 4.7 44 D -2.82

 

US Global
Communication Services 16.6 15.6
Discretionary 27.6 18.7
Energy 8.6 31.6
Financials 14.1 12.7
Health Care 29.2 25.2
Industrials 19.2 18.8
IT 36.9 23.3
Materials 19.6 18.7
Staples 22.3 21.1
Utilities 23.7 16.8

Good investing,
Meb Faber
theideafarm.com