CAPE – Peering Into The Future

The usefulness of CAPE as a valuation metric for broader markets has become a religious argument.  CAPE clearly cannot be used to market time (what can?) and this time could always be different, but this EconompicData chart illustrates what we consider a fundamental “law” of finance – price and returns are inversely related.  That is, the higher the valuation of an asset, the lower the expected return should be for that asset (and vice versa).

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5 Charlie Munger Quotes Every Investor Should Know

Charlie Munger is perhaps best-known as the vice chairman of Berkshire Hathaway, where he has been Warren Buffett's longtime business partner. As well as holding this position, he also servers as the chairman of the Daily Journal Corporation and is a director of Costco Wholesale Corporation. Munger started his investment career in the 1960s when, Read More


Article by Cook & Bynum