Global Valuation Updates!

Quarterly CAPE Ratio Updates

First quarter is in the books!

Median CAPE Ratio: 18
25% cheapest: 12
25% most expensive: 30

Average of Foreign Developed: 23
Average of Foreign Emerging 15

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 %
Poland 9.7 23.4 4.4 1 3 E -48.03
Czech Republic 10.7 12.8 4.6 1.2 4 E -39.71
Russia 7.8 26.3 4.9 1 5 E -60.41
Egypt 9.6 22.8 5.3 1.1 5 E -72.91
Colombia 11.6 22.1 7 1 7 E -39.12
Turkey 8.2 28.5 6.4 1.1 8 E -52.47
Spain 14.7 19.4 6.5 1.2 8 D -25.66
Chile 14.1 28.1 7.7 1.3 11 E -39.27
Portugal 19.6 20.5 5.4 1.3 12 D -52.53
Singapore 13.6 25.6 10.6 1.3 13 D -1.65
U.K. 14.5 25.4 8.1 1.7 13 D -9.48
Greece -2.4 24.1 4.4 0.5 14 E -96.32
Austria 15.7 40.7 6.6 1.2 16 D -38.86
Italy 21.9 33.8 6.2 1.2 17 D -32.15
Malaysia 15.2 29.4 9.8 1.6 17 E -6.53
Norway 17.5 30 7.8 1.7 17 D -0.26
Hungary 14.9 60.6 5.9 1.6 18 E -13.3
Philippines 14.3 44.8 9.2 1.7 19 E -49.11
Hong Kong 16.3 39.2 11.9 1.4 21 D -3.59
Thailand 16.6 33.4 9.9 2.1 22 E -15.48
Indonesia 15.1 35.4 9.8 2.3 23 E -22.44
Peru 14.4 35.6 13.6 2 24 E -32.33
Brazil 18.9 33.9 10.9 2 24 E -7.6
Belgium 20.8 33.1 12 1.9 24 D -16.14
Korea 18.1 94.2 9.4 1.6 24 D -5.97
Mexico 18.6 46.3 8.8 2.1 25 E -14.42
Germany 19.9 43.2 9.7 2 25 D -0.49
South Africa 18.4 33.7 12 2.2 25 E -8.53
Australia 19.4 26.7 13 2.2 25 D -2.28
France 22.6 40.5 11.4 1.9 26 D -0.37
Israel 19.1 50.5 12.1 1.9 29 D -3.18
Japan 23.1 67.4 11.3 1.7 29 D -1.97
Canada 23.5 40.5 12 2.1 30 D -1.5
China 17.2 56.6 13 2.2 30 E -16.87
Finland 26 33.5 14.6 2.6 31 D -35.91
New Zealand 29.5 38 16 2.9 34 D -10.05
Taiwan 29 48.5 15.8 3.1 36 E -2.05
Switzerland 27.1 43.8 19.8 3.4 37 D -0.47
Sweden 25.7 50.8 18.4 3.3 37 D -0.12
Netherlands 32.1 67.9 19.9 3.2 40 D 0
Ireland 37.5 88.5 19.9 2.7 40 D -9.25
India 27.8 101.9 17.7 3.6 40 E -6.46
U.S. 36.1 87.8 21.8 4.8 42 D -0.69
Denmark 39.3 94.5 25.5 5.5 44 D -1.44
US Global
Communication Services 24.3 15.6
Discretionary 44.5 18.7
Energy 13.7 31.6
Financials 18.9 12.7
Health Care 35.9 25.2
Industrials 28.5 18.8
IT 55.3 23.3
Materials 31.9 18.7
Staples 27.3 21.1
Utilities 26.8 16.8

Good investing,
Meb Faber
theideafarm.com