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DewDiligence

08/14/11 11:56 PM

#125112 RE: iwfal #125108

For starters, the 10-year averaging period does not reflect the duration of a typical business cycle, so the CAPE acronym is itself a misnomer.
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biomaven0

08/15/11 10:20 AM

#125126 RE: iwfal #125108

>>Shiller's CAPE metric

My big complaint is that it is not normalized for long-term interest rates. An earnings yield of 10% is a very different beast depending on whether long term risk-free rates are 2% or are 10%.

Peter