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, end of Q2, and end of Q3 (current).
Median CAPE Ratio: 17, 12, 13, 15 (now)
25% cheapest: 12, 9, 10, 10
25% most expensive: 28, 22, 24, 27
Average of Foreign Developed: 22, 17, 18, 20
Average of Foreign Emerging 16, 11, 12, 13
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.
| CAPE | CAPD | CAPCF | CAPB | Average Rank | Dev or Emerging | Real Drawdown % | |
| Czech Republic | 7.7 | 9.1 | 3.3 | 0.9 | 3 | E | -55.31 |
| Russia | 6.4 | 23.1 | 4 | 0.8 | 5 | E | -67.42 |
| Poland | 8.6 | 20.6 | 3.9 | 0.9 | 5 | E | -52.62 |
| Spain | 11 | 14.8 | 4.9 | 1 | 7 | D | -41.67 |
| Colombia | 10.1 | 19.5 | 6.2 | 0.9 | 8 | E | -46.96 |
| Austria | 10.6 | 27 | 4.4 | 0.8 | 8 | D | -59.14 |
| Turkey | 7.4 | 25.6 | 5.8 | 1 | 9 | E | -56.92 |
| Chile | 10.5 | 21.8 | 5.9 | 1 | 9 | E | -53.45 |
| Egypt | 10.6 | 24.1 | 5.7 | 1.1 | 11 | E | -70.43 |
| Portugal | 15.5 | 17.4 | 4.5 | 1.1 | 12 | D | -59.15 |
| Greece | -1.8 | 15.3 | 2.8 | 0.3 | 12 | E | -97.3 |
| Singapore | 11 | 21.2 | 8.6 | 1 | 13 | D | -19.71 |
| U.K. | 12.5 | 22 | 7.1 | 1.5 | 14 | D | -22.72 |
| Italy | 16.9 | 25.8 | 4.8 | 0.9 | 15 | D | -46.8 |
| Norway | 14.3 | 25 | 6.5 | 1.5 | 16 | D | -16.45 |
| Hungary | 11 | 43.6 | 4.5 | 1.2 | 17 | E | -35.98 |
| Thailand | 12.5 | 25.7 | 7.5 | 1.6 | 17 | E | -35.83 |
| Hong Kong | 13.1 | 31.9 | 9.7 | 1.2 | 21 | D | -17.79 |
| Indonesia | 12.4 | 29.4 | 8.2 | 1.9 | 21 | E | -36.24 |
| Malaysia | 14.6 | 28.8 | 9.4 | 1.5 | 21 | E | -10.31 |
| Mexico | 15 | 37.9 | 7.2 | 1.7 | 23 | E | -30.99 |
| Korea | 13.7 | 74.3 | 7.3 | 1.3 | 23 | D | -5.93 |
| Brazil | 15.7 | 29 | 9.2 | 1.7 | 24 | E | -20.58 |
| Philippines | 13.3 | 41.6 | 8.6 | 1.7 | 24 | E | -53.76 |
| France | 17.9 | 32.4 | 9.2 | 1.6 | 25 | D | -19.36 |
| Peru | 12 | 32.5 | 11.5 | 1.8 | 25 | E | -41.03 |
| South Africa | 15.3 | 28.1 | 10.1 | 1.9 | 25 | E | -24.04 |
| Australia | 16.8 | 23 | 11.4 | 1.9 | 26 | D | -16.1 |
| Israel | 15.3 | 40 | 9.9 | 1.6 | 27 | D | -14.25 |
| Germany | 17.2 | 38.1 | 8.5 | 1.8 | 27 | D | -10.26 |
| Belgium | 18.3 | 29.6 | 10.6 | 1.7 | 28 | D | -25.88 |
| Japan | 19.3 | 57.6 | 9.4 | 1.5 | 29 | D | -9.47 |
| Canada | 20.2 | 35.6 | 10.4 | 1.9 | 31 | D | -8.01 |
| China | 15.7 | 51.4 | 11.7 | 2 | 33 | E | -5.66 |
| Finland | 23.4 | 30.5 | 13.2 | 2.4 | 33 | D | -42.18 |
| Taiwan | 22.3 | 37.6 | 12.1 | 2.4 | 34 | E | -3.59 |
| New Zealand | 29.2 | 37.5 | 15.7 | 2.9 | 37 | D | -3.69 |
| Sweden | 22.1 | 42.4 | 15.9 | 2.9 | 38 | D | -1.32 |
| Netherlands | 24.6 | 51.7 | 15.3 | 2.5 | 38 | D | -6.26 |
| India | 21.9 | 82.3 | 14 | 2.9 | 38 | E | -25.15 |
| Switzerland | 25.1 | 41.4 | 18.6 | 3.2 | 39 | D | -6.27 |
| Ireland | 35.6 | 74.1 | 16.8 | 2.3 | 40 | D | -25.59 |
| U.S. | 30.5 | 75.7 | 18.5 | 4.1 | 42 | D | -5.78 |
| Denmark | 37 | 89.9 | 24 | 5.1 | 44 | D | -0.41 |
| US | Global | ||||||
| Communication Services | 19.8 | 15.6 | |||||
| Discretionary | 36.3 | 18.7 | |||||
| Energy | 11.7 | 31.6 | |||||
| Financials | 15.5 | 12.7 | |||||
| Health Care | 32.6 | 25.2 | |||||
| Industrials | 22.2 | 18.8 | |||||
| IT | 46.9 | 23.3 | |||||
| Materials | 24.6 | 18.7 | |||||
| Staples | 23.9 | 21.1 | |||||
| Utilities | 24.2 | 16.8 |
Good investing,
Meb Faber
theideafarm.com