FAQs

Shiller PE Ratio FAQs

Where does the data for this ratio come from?

The tool pulls the official CAPE10 series from Multpl, which is based on the research of Yale Professor Robert Shiller.

Why is the "Historical Mean" set to 17.0?

The long-term average of the Shiller PE since 1881 is approximately 17.0. Some investors prefer to use a higher mean (e.g., 19-20) for the post-WWII era.

Does a high Shiller PE mean the market will crash immediately?

No. Valuations are not timing tools; markets can stay overvalued for years. It is a measure of long-term risk and future return expectations.

What is the difference between Monthly and Yearly resolution?

Monthly provides more tactical data points, while Yearly is better for high-level secular trend analysis and historical backtesting.

How should I interpret the "Deviation" stat in the dashboard?

It shows how far the current ratio is from the Historical Mean. A +50% deviation suggests the market is significantly stretched relative to its historical norm.