Global Valuation Updates!

Quarterly CAPE Ratio Updates

Finally we get to turn the page on a new year!

Below I thought we’d report the summary CAPEs with year end 2019, and current.

Median CAPE Ratio: 17, 17 (now)
25% cheapest: 12, 12
25% most expensive: 28, 28

Average of Foreign Developed: 22, 22
Average of Foreign Emerging 16, 15

It’s almost like 2020 didn’t happen…

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 10.

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 9.8 11.6 4.2 1.1 2 E -43.99
Poland 9.7 23.5 4.5 1 3 E -46.76
Russia 7.3 25.3 4.5 0.9 4 E -62.77
Egypt 9.9 23.1 5.4 1.1 4 E -72.03
Spain 13.6 18.3 6.1 1.2 6 D -28.99
Chile 12.1 24.5 6.7 1.1 7 E -47.32
Turkey 9 31.3 7 1.2 8 E -48.06
Portugal 18.5 20.1 5.3 1.3 9 D -52.98
U.K. 14 24.4 7.8 1.6 9 D -13.58
Colombia 13.1 25.3 8 1.1 9 E -30.68
Singapore 12.5 23.7 9.7 1.2 9 D -9.47
Austria 14 35.8 5.9 1 11 D -45.8
Norway 16.4 28.3 7.4 1.7 12 D -4.79
Thailand 14.8 30.3 8.9 1.9 12 E -24.16
Greece -2.3 20.9 3.8 0.4 12 E -96.57
Italy 19.8 30.3 5.6 1.1 13 D -38.42
Malaysia 15.8 30.8 10.2 1.6 14 E -3.17
Hungary 14.5 58.5 5.8 1.6 15 E -15.28
South Africa 16.5 30.2 10.8 2 16 E -18.45
Indonesia 15.7 37.1 10.3 2.4 16 E -19.15
Hong Kong 15 36.4 11.1 1.3 16 D -5.67
Mexico 17.6 44.3 8.4 2 18 E -18.44
Australia 18.9 25.9 12.7 2.1 18 D -5.71
Germany 18.7 41.1 9.2 1.9 19 D -2.65
Philippines 16.1 50.3 10.4 2 20 E -44.25
Brazil 19.6 35.5 11.4 2.1 20 E -2.5
Peru 15.8 40.9 15 2.3 20 E -23.98
Belgium 20.4 32.7 11.8 1.8 20 D -17.31
Korea 17.3 91.9 9.1 1.6 21 D -0.16
France 20.7 37.4 10.6 1.8 21 D -7.28
Canada 21.8 38.1 11.2 2 22 D -1
Israel 18.2 47.7 11.6 1.9 22 D -0.46
Finland 25.1 32.7 14.1 2.5 23 D -37.95
China 17.5 57.5 13.1 2.2 23 E 0
Japan 21.6 63.7 10.5 1.6 24 D -0.74
Taiwan 26.2 44 14.3 2.8 26 E 0
Sweden 22.9 44.7 16.4 3 27 D -0.86
New Zealand 31.8 41 17.2 3.2 28 D -1.7
Switzerland 26.2 42.7 19.3 3.3 28 D -1.93
Netherlands 27.9 58.8 17.3 2.8 30 D -0.49
India 25.7 95.7 16.4 3.4 30 E -12.12
Ireland 36.3 81.3 18.4 2.5 31 D -17.6
U.S. 34.6 85.1 20.9 4.6 32 D 0
Denmark 39.7 96 25.8 5.5 34 D -0.63
US Global
Communication Services 21.3 15.6
Discretionary 41.3 18.7
Energy 9.9 31.6
Financials 15.7 12.7
Health Care 33.7 25.2
Industrials 24.6 18.8
IT 50.7 23.3
Materials 27.7 18.7
Staples 25.9 21.1
Utilities 25.3 16.8

Good investing,
Meb Faber
theideafarm.com