For the complete documentation index, see llms.txt. This page is also available as Markdown.
Usage
Shiller PE Ratio Usage
Use the Shiller PE Ratio to move from tracking momentum to identifying generational value opportunities.
Generational Investing: Identify buying opportunities when the ratio enters the Extreme Undervalued (Cyan/Blue) zones.
Risk Management: Exercise caution or hedge positions when the ratio enters the Extreme Overvalued (Red) zone, as forward 10-year returns are historically lower from these levels.
Mean Reversion Trades: Use the Historical Mean as a long-term target; markets that stretch too far from the mean often eventually revert.
Smoothing Analysis: Adjust the smoothing input to filter out monthly noise and focus on the secular valuation trend.
