Valuation-Informed Indexing #633: There Can Be Good Reasons for the CAPE Value to Go Above 17

I’ve posted Entry #633 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called There Can Be Good Reasons for the CAPE Value to Go Above 17.

Juicy Excerpt: We cannot say precisely what the CAPE value should be at a given time. There are circumstances in which a CAPE value above 17 could be justified by the economic realities. But we can say with a good bit of confidence what the proper CAPE value cannot be. A CAPE value of 44 is so far off from the norm that it can safely be said that it is the product of irrational exuberance. Any CAPE value above 25 is dangerous. The entire history of the market tells that tale.