Global Valuation Updates!

Quarterly CAPE Ratio Updates!  

doh, I thought I sent this out already….sorry for the delay!

Median CAPE Ratio: 18
25% most expensive: 28 (U.S. in this bucket)
25% cheapest 12

Average of Foreign Developed: 21
Average of Foreign Emerging 16

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 -3 or 3.

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 CAPD, CAPB, and CAPCF, just not on CAPE.

The cheap stuff is still dominated by Europe…but some other names have been creeping in over the past year, particularly in Asia…

Here it is in Excel too.

CAPE CAPD CAPCF CAPB Average Rank Dev or Emerging Real Drawdown %
Russia 6.8 28.9 4.2 0.9 4 E -69.96
Czech Republic 10.4 12.4 4.7 1.3 4 E -36.87
Turkey 7.9 26.8 6.2 1.1 5 E -55.81
Portugal 15.8 19.4 4.8 1.2 6 D -55.29
Spain 13.7 18.9 6.2 1.3 7 D -23.26
Poland 12.3 28.4 5.6 1.3 7 E -34.09
Egypt 13.6 27 7.1 1.5 9 E -61.36
Italy 19 28.9 5.3 1 12 D -41.31
Greece -3 11.1 2 0.3 12 E -97
Singapore 13.6 26.6 10.5 1.3 12 D -8.91
Norway 16.2 29.9 7.4 1.7 15 D -10.73
Austria 16.8 40 6.5 1.2 16 D -42.12
Brazil 16 30 9.6 1.7 16 E -16.02
Korea 12.7 75.2 6.9 1.2 16 D -18.02
U.K. 16 29 9 1.9 16 D -6.46
Malaysia 15.4 31.7 10.1 1.7 17 E -9.46
Chile 16.5 35.9 9.5 1.6 18 E -28.28
Colombia 16.9 31.5 11.1 1.5 19 E -22.57
Israel 15.9 39.3 10.4 1.7 21 D -12.14
Germany 17.8 38.4 8.7 1.8 21 D -16.22
Australia 18.8 24.9 12.5 2 22 D -1.32
Hungary 16.4 63.9 7.1 1.8 22 E -12.01
China 14.5 45.8 10.4 1.9 23 E -18.94
Taiwan 20.4 32.8 10.4 2 24 E -5.13
Hong Kong 17.2 40.9 12.9 1.5 25 D -3.45
South Africa 17.6 33.4 11.7 2.3 25 E -15.77
France 20.9 36.7 10.5 1.8 26 D -5.61
Japan 23.2 63.7 10 1.5 26 D -14.37
Mexico 18.8 49 9 2.2 27 E -19.4
Canada 21.4 38.1 10.7 2 28 D -3.29
Thailand 18.6 38.7 11.3 2.4 28 E -12.86
Finland 23.3 30.2 12.7 2.3 29 D -46.4
Belgium 24 37.3 13 2 31 D -15.04
Indonesia 18.6 45.4 12.5 3 32 E -10.3
Sweden 20.7 37.8 14.6 2.6 33 D -5.26
New Zealand 27.4 33.7 14.1 2.7 34 D 0
Philippines 20.1 60.9 13.1 2.6 34 E -34.6
Netherlands 24.9 49.4 14.3 2.4 36 D -3.84
Peru 19.7 59.3 18.8 3.1 37 E -12.04
Switzerland 25.4 41.7 18.3 3 38 D -0.38
Ireland 46.5 69.8 15.8 2.1 38 D -34.8
India 23.6 94.2 15.5 3.3 40 E -19.23
U.S. 29.7 74.1 17.3 3.8 42 D -3.33
Denmark 33.1 82.3 20.2 4.1 43 D -2.47

SECTORS

US Global
Discretionary 34 19
Energy 17 32
Financials 22 13
Health Care 31 25
Industrials 23 18
IT 35 23
Materials 26 19
Staples 22 21
Communications 16 16
Utilities 23 17

Good investing,
Meb Faber
theideafarm.com