Global Valuation Updates!

Quarterly CAPE Ratio Updates

First half is in the books!

Median CAPE Ratio: 19
25% cheapest: 12
25% most expensive: 32

Average of Foreign Developed: 24
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 cheap on other metrics just not on CAPE.

Here it is in Excel too.

CAPE CAPD CAPCF CAPB Average Rank Dev or Emerging Real Drawdown %
Egypt 8.8 21.5 4.9 1 3 E -75.02
Poland 11.1 26.7 5 1.1 5 E -41.31
Colombia 11.3 21.3 6.7 0.9 5 E -41.51
Czech Republic 11.9 14.2 5.1 1.3 6 E -34.08
Turkey 7.8 27.3 6.1 1 6 E -54.29
Russia 8.4 27.4 5.2 1.1 6 E -57.17
Chile 12.4 24.3 6.7 1.1 8 E -47.29
Spain 15.6 20.3 6.8 1.2 9 D -23.42
Portugal 20.1 20.4 5.4 1.3 11 D -52.26
Singapore 13.7 25.3 10.6 1.2 12 D -2.72
U.K. 15.2 26.3 8.4 1.8 14 D -5.51
Greece -2.5 26.8 4.8 0.5 14 E -96.16
Malaysia 14.6 28.1 9.4 1.5 14 E -10.08
Italy 22.7 35.1 6.4 1.2 17 D -29.72
Norway 18.4 31.1 8.1 1.8 17 D -1.76
Austria 16.7 43.8 7.1 1.3 18 D -33.85
Peru 13.3 32 12.5 1.8 19 E -39.07
Indonesia 14.2 33.1 9.1 2.1 19 E -26.8
Hungary 15.9 65.5 6.2 1.7 19 E -6.52
Thailand 16.3 32.7 9.6 2 19 E -16.92
Hong Kong 16.6 39.5 12.1 1.4 21 D -3.1
Philippines 15.6 48.8 10 1.9 22 E -44.96
South Africa 17.5 32.1 11.3 2.1 23 E -12.85
Germany 20.2 43.5 9.7 2 24 D -1.62
Mexico 19.2 47.5 9 2.1 25 E -11.19
Korea 19.1 97.8 9.8 1.7 26 D -1.08
Belgium 22.2 35.1 12.8 2 26 D -10.06
Brazil 20.4 36 11.7 2.1 26 E -2.29
Australia 21 28.7 13.9 2.3 28 D -0.96
Japan 22.8 66.1 11.2 1.7 28 D -1.99
France 24.3 43.1 12.1 2 28 D -2.27
Israel 20.4 54.2 12.8 2 30 D -0.94
China 17.6 58.2 13.4 2.2 30 E -14.26
Canada 25 42.9 12.8 2.3 31 D -0.31
Finland 28.4 36.2 15.9 2.8 33 D -30.65
New Zealand 28.7 37.1 15.6 2.8 33 D -11.85
Sweden 26.1 52.5 18.7 3.4 36 D -1.25
Taiwan 30.2 50.5 16.6 3.2 37 E -1.59
Switzerland 29 46.8 21.1 3.6 38 D -0.81
Ireland 36.3 88.1 19.7 2.7 39 D -8.67
Netherlands 33.6 71.1 20.9 3.4 40 D -1.13
India 30 108.6 19 3.8 41 E -1.1
U.S. 37.8 91.4 22.9 5 42 D 0
Denmark 42.8 102.5 28 6.1 44 D -0.22
US Global
Communication Services 25.9 15.6
Discretionary 45.1 18.7
Energy 19.2 31.6
Financials 21 12.7
Health Care 35.9 25.2
Industrials 31.4 18.8
IT 54 23.3
Materials 34.2 18.7
Staples 26.9 21.1
Utilities 26.9 16.8