"The CAPE has a far better forecasting record than the traditional P/E.
The CAPE currently stands at 23.6, according to Shiller. That is higher than 90% of comparable readings since the 1870s.
The good news here, if there is any, is that valuations exert only a weak gravitational pull over the stock marketâ??s near-term direction. So there is no reason that the bull market couldnâ??t continue for a lot longer.
But the stock marketâ??s long-term prospects certainly appear bleak: According to an analysis Asness recently conducted, the current CAPE level of 23.6 translates into a forecast that the S&P will produce a 10-year real return â?? between now and mid 2023, in other words â?? of just 0.9%.