Editor’s note: This article was also posted at Advisor Perspectives dshort.com.
This analysis uses the methodology of Professor Robert Shiller for valuation of the S&P 500 currently (10 December 2013) producing a CAPE PE value of 25.o8. This is higher than any other values over the past 100 years except for values reached in 1928-29, 1994-2000 and 2003-07. A correction applied to the Shiller data brings the CARE PE down to 23.44 which then also includes the market peak of 1966 with a comparable valuation. The Shiller methodology is compared to other valuation methods which also show various amounts of overvaluation.
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