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I'll admit, I'm proud of myself for coming up with that one. :) Curiosity got the best of me, so I skimmed the article and did some basic googling. If I understand it correctly they started with a profit over earnings ratio, but used a 10-year earnings average in the denominator which he calls CAPE since it smooths out over cycles. (Was that what he got his Nobel for?!) Hussman then calculates his "CAPEh" in here: If that's par for the course over in Investor Land®, I don't understand how people fall for this crap. Something something fooling some people all of the time...