Info · Reference
Is the market expensive?
One number tries to answer that: the CAPE ratio (cyclically adjusted price-to-earnings, or P/E10). It's the market's price divided by the average of the last ten years of earnings — smoothing out booms and busts so today's price can be compared across more than a century. Higher means pricier relative to earnings.
Latest Jul 2026 Robert J. Shiller, Irrational Exuberance data (ie_data.xls), Yale University. CAPE (P/E10) is the real S&P price divided by the average of the last 10 years of real earnings. Monthly, 1881–2026. Latest Jul 2026. · source & method
- 41.4 CAPE today — about 2.5× its long-run median
- 16.6 the median since 1881 (mean 17.8)
- 99th percentile — today's reading is higher than 99% of all months on record
140+ years of CAPE
The two great peaks are 1929 and the 44.2 record of 1999 (the dot-com bubble); the 4.78 trough came in 1920. Today's reading sits near the top of that whole range.
What it does — and doesn't — tell you
A high CAPE is not a sell signal. It has essentially no power to predict next year's return, and the market can stay expensive for many years — it has been above its historical average for most of the last three decades. As a timing tool it's useless.
What it weakly tracks is long-run returns. Historically, a higher starting CAPE has gone with somewhat lower average real returns over the following 10–15 years — a loose tendency, not a guarantee, and one with a wide margin of error.
Comparisons across a century deserve caution. Accounting rules, tax, interest rates, buybacks, and the mix of industries have all changed, so some argue a permanently higher CAPE is now justified. Treat it as context for your expectations, not a recommendation to act — nothing here is financial advice.
Sources & method
CAPE from Robert Shiller's ie_data.xls. Refresh with npm run data:cape.
Research
- Campbell, J. Y., & Shiller, R. J. (1988). “Stock Prices, Earnings, and Expected Dividends.” The Journal of Finance 43(3): 661–676.
- Shiller, R. J. (2000). Irrational Exuberance. Princeton University Press.
Data
- U.S. Stock Markets 1871–Present and CAPE Ratio, Robert J. Shiller, Yale University. The spreadsheet (ie_data.xls) behind Irrational Exuberance, republished by its author with a disclaimer and no usage terms. We ship monthly real total returns and the CAPE series derived from it, with attribution.
Educational use only, not financial advice. Every figure traces back to the sources above or to the inputs you set — the full method and the source code are public.