Replies to post #125102 on Biotech Values

[iwfal]

Robert Shiller’s CAPE* metric is utterly useless for valuing stocks, IMO.

Why? I'll stipulate that all metrics have some weaknesses - but Shiller's seems better than many as a long term valuation metric. E.g. recently there was an article positing the cheapness of stocks because the forward P/E is so low - but of course it is well known that the stock market movements precede the macro economy (and earnings trends).

[linhdtu]

So Dew, do you mind explain what are your objections to Shiller's CAPE ?

I actually like it the first time I learned about it. It instantly appealed to my common sense.

Just before a mkt collapse , PEs (of SP500) historically looked cheap and at mkt bottom, PEs looked horribly high and expensive.

For a poor retailer sap like myself, how can I judge/tell whether a mkt is cheap or expensive. Take 95F for a summer average
temperature. In the desert where I have lived for the last 10 yrs, that would be actually a great summer ( not being so hot) but for Oregon where I lived for 30 yrs , it would have been a hot summer.