If you've been feeling apprehensive about the stock market lately, you're in the majority. Around three-quarters of American investors said they were concerned about a market downturn in 2026, according to a July survey by MarketWise.
Pessimism about the future of the market isn't unusual: Even in the most bullish runs, fears of a market crash are present. But what is unusual about the current bull run is the historic valuation extreme it's approaching -- one seen only once in the last 150 years.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
The cyclically adjusted price-to-earnings (CAPE) ratio, which divides the price of an index, such as the S&P 500 (SNPINDEX: ^GSPC), by its average inflation-adjusted earnings over the last 10 years, has climbed to a startling level. By one calculation, the CAPE ratio currently sits at roughly 41.4 -- only a few points below the all-time high reached in the dot-com era.
A high CAPE ratio usually indicates that stocks are very expensive, at least by historical standards. For context, the CAPE ratio has averaged about 16 to 17 over the last century and a half, and it has crossed the 30 marker only a handful of times, most notably during the Roaring '20s (i.e., just before the Great Depression) and the tech bubble of the late '90s.
#flashing
Pessimism about the future of the market isn't unusual: Even in the most bullish runs, fears of a market crash are present. But what is unusual about the current bull run is the historic valuation extreme it's approaching -- one seen only once in the last 150 years.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
The cyclically adjusted price-to-earnings (CAPE) ratio, which divides the price of an index, such as the S&P 500 (SNPINDEX: ^GSPC), by its average inflation-adjusted earnings over the last 10 years, has climbed to a startling level. By one calculation, the CAPE ratio currently sits at roughly 41.4 -- only a few points below the all-time high reached in the dot-com era.
A high CAPE ratio usually indicates that stocks are very expensive, at least by historical standards. For context, the CAPE ratio has averaged about 16 to 17 over the last century and a half, and it has crossed the 30 marker only a handful of times, most notably during the Roaring '20s (i.e., just before the Great Depression) and the tech bubble of the late '90s.
#flashing
3 months ago
