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Today, the S&P 500’s cyclically adjusted price-to-earnings ratio (CAPE) is nearing historic highs, signaling market valuations may be in overheated territory.
In December 2024, the S&P 500 CAPE ratio stood at 37.9—well above its long-term average of 17.6. Notably, it has only exceeded this level during the Dot-Com bubble and in 2021.
This graphic from Picton Mahoney Asset Management shows the S&P 500 CAPE ratio since 1920.
Big tech and AI is driving this bus
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hard to believe that the drop was only 10 percent in 2000
I remember feeling very nervous in April 2000 and so many dot coms or bombs were imploding
was OP even alive in 2000 lol?
even 2022 wasn't so bad, -20% Market reacted to inflation and interest rates, not even Cape being too high in 2021
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hard to believe that the drop was only 10 percent in 2000
SP500 returns the year after peak CAPE ratio
was OP even alive in 2000 lol?
I was so alive!
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cape ratio was 44 in 1999
very high
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