Large US Banks Trading At CAPE Ratio Of 10

The Shiller CAPE (Cyclically Adjusted Price Earning) Ratio assesses the valuation of stocks in the context of their inflation-adjusted price-earning ratios as averaged over the long term, i.e. ten years. (Read more about the ratio here and here) The S&P 500 is over-extended by this measure Applying Shiller’s Cape Ratio to the S&P 500 yields a value of 26, very high in the historical context and possibly indicating that the market is overbought and therefore vulnerable to a correction or slower returns in the future. “The inflation adjusted PE is at the third highest level in 135 years,” says Richard…