Has the US Stock Market Ever Been This Expensive?
Rarely, if ever. The Buffett Indicator reads 234% — higher than 99% of all months since 1989 — and the Shiller PE reads 40, higher than 99% of all months since 1871. Neither measure is at an all-time high, but both sit in the top slice of their histories.
The evidence
The two yardsticks are built differently — one compares prices with the output of the whole economy, the other with a decade of inflation-adjusted earnings — and they cover different windows (the Buffett series begins in 1989, the Shiller series in 1871). That they are saying the same thing is what makes the reading hard to dismiss.
The caveat
Why this answer is not a forecast, and never will be.
Expensive is not a countdown. The late-1990s market sat above every prior valuation record for about five years, and an investor who sold on valuation alone in 1996 missed a near-tripling before the peak.
Both measures have blind spots: overseas earnings inflate market cap relative to domestic GDP, accounting standards have changed over a century of earnings data, and a low-rate world can rationally support higher multiples.
The strongest argument against treating any of this as a forecast is on the market analogs page: the historical months that most closely match today’s conditions were followed by both strong and poor S&P 500 returns. Nearly identical setups have preceded opposite outcomes, and any page that tells you otherwise is selling certainty it does not have.
Related reading
More questions, answered live
The current reading against the highest value in the full history of the series.
Every monthly reading above 40 in the full CAPE history, and what followed.
The date the spread crossed back above zero, and the record of past un-inversions.
The last month real rates stood at or above today’s reading, from the full series.
Computed from public data for educational purposes only. Not investment advice. Past patterns do not guarantee future results.