Replies to post #125112 on Biotech Values

[iwfal]

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.

Ok, its a misnomer. Perhaps TAPE (Ten-year) would be better - but more substantively:

a) it is definitively longer than the average business cycle (so the induced errors should start to get averaged out - certainly more so than, for instance, the forward P/E so often touted). Alternatively: a) if you tried limit it to one business cycle exactly you'd be prognosticating on your current location; b) if you go longer than 10 years you'd miss secular trends(?).

b) Do you know of a better Stock Market value metric? A better P/E metric?

(Note: I am not touting CAPE per se - only claiming that from the 50,000 ft perspective it seems likely to be more accurate than many of the more commonly quoted P/E metrics.)