MyPlanIQ submits:In a previous article we looked at Yale Professor Robert Shiller's Cyclically Adjusted Price Earning’ ratio (CAPE10). CAPE10 is defined as the ratio of price to the average of last 10 year trailing S&P 500 annual earnings.Complete Story »
MyPlanIQ submits: Yale Professor Robert Shiller has devised and maintained his Cyclically Adjusted Price Earning ratio (CAPE10) as an alternative to the P/E ratio to value the U.S. stock market.CAPE10 is defined as the ratio of price to the average of the last 10-year trailing S&P 500 annual earnings.
MyPlanIQ submits:Yale Professor Robert Shiller’s Cyclically Adjusted Price Earning Ratio (CAPE10) was reviewed October 2009. CAPE10 is defined as the ratio of price to the average of last 10 year trailing S&P 500 annual earnings.
Robert Shiller is a professor of economics and finance at Yale University. He is the author of Irrational Exuberance, which in 2000 predicted the collapse of the tech bubble and is now in its third edition. He was awarded the Nobel Prize in Economic Sciences in 2013 for his work on asset prices and financial market behavior. In the attached interview he observes that the recent equity run-up seems to be driven more by fear than by exuberance, as a lack of confidence in the future prompts investors to save more and thereby bid up asset prices.
By Ron Rowland:Barclays introduced a new exchange traded note (“ETN”) on October 11 under the ETN+ brand instead of the more familiar iPath brand. The Barclays ETN+ Shiller CAPE ETN (CAPE) will track the Shiller Barclays CAPE US Core Sector Index minus the 0.45% annual fee.
By Tom Lydon:
Adding to the growing number of enhanced or "intelligent" beta indexing strategies, Barclays, the bank behind the iPath suite of exchange traded notes, launched a new ETN based on Yale finance professor Robert Shiller's cyclically adjusted P/E ratio, or CAPE.
Robert Shiller, Yale professor, and founder of the S&P/Case-Shiller home price index just appeared on CNBC to talk about the latest Case-Shiller report, which showed home price growth slowed some in July. Shiller also talked about the stock market.
MyPlanIQ submits:In a previous article we looked at how the CAPE can be used as a signal to drive selection of assets. We created five regions based on the ratio of the current CAPE10 to the long term average CAPE10: