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Shiller PE Ratio (CAPE) — Cyclically Adjusted PE

Robert Shiller's valuation metric uses ten years of smoothed earnings to remove short-term noise. Past readings above 30 came with weak long-term returns.

Shiller PE Ratio

Cyclically Adjusted PE Ratio (CAPE). Measures stock market valuation relative to 10-year average earnings. High values indicate overvaluation.

Thresholds: Negative >35 • Warning ≥25 • Positive <25

NEGATIVE

Today's reading sits at the 99th percentile of 1867 months since 1871.

Current Value
41
3-month Change
+0.82
3-month % Change
+2.04%

Why this can crash the market

The CAPE ratio shows how many years of earnings you pay for up front. At extreme readings, the price already assumes a decade of perfect growth. The multiple breaks first: when growth disappoints, investors stop paying for those future years and prices fall even while companies stay profitable. The S&P 500 sits inside most retirement accounts.

Historical Data

The last three years • Source: multpl.com Shiller PE by month

Shiller PE Ratio
41▲ 0 (0.20%) vs prevSep 9, 2026

What Is the Shiller PE Ratio?

The CAPE ratio divides the S&P 500 price by the average of 10 years of inflation-adjusted earnings. By smoothing earnings across a full business cycle, it avoids the distortions that plague the standard PE ratio during booms and recessions.

How It's Calculated

  • CAPE = S&P 500 Price / 10-Year Avg Real Earnings
  • Earnings adjusted for CPI inflation
  • Smooths out business cycle fluctuations
  • Historical average: approximately 16-17

Valuation Thresholds

  • Below 15: Undervalued. Strong returns followed in the past.
  • 15-25: Fair value range
  • 25-35: Overvalued. Below-average returns followed.
  • Above 35: Extreme. Every earlier instance came before a crash.

CAPE and Future Returns

A high CAPE has come with low returns over the next ten years, and a low CAPE with high returns. This makes it useful for setting long-term expectations.

CAPE Below 15

Historical 10-year average annual return: about 10-12%.

CAPE 20-30

Historical 10-year average annual return: ~4-6%. Decent but below the long-term average of 7-10%.

CAPE Above 30

Historical 10-year average annual return: ~0-3%. Often accompanied by significant drawdowns along the way.

Historical Extremes

CAPE hit 44.2 in December 1999, its highest reading, just before the dot-com crash took 78% off the NASDAQ. It reached 27.5 before the 2008 crisis. An extreme CAPE does not say when a crash comes. It says the price already assumes everything goes right.

Get told when CAPE moves

The Shiller PE moves slowly. One email a week when the score moved, with the current CAPE reading and the other five indicators.

At most one email a week, and only in weeks something actually moved. No account, one click to unsubscribe, and the address is never shared.

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Methodology

Every formula, source series and threshold behind these numbers

Shiller PE data provided for educational purposes only. Not investment advice. Past performance does not guarantee future results.