CAPE is ignorant of interest rates
Any prediction based on models can be overwhelmed by what happens in the real world
The investor does not have to be an expert in macro-economic theory.
Today’s investor cannot tell what percentage gain in earnings, dividends and prices he may expect in the next ten years
About forty years ago Buffett experienced a Damascene conversion
Wrap up on the drawbacks of CAPE. A fair level for price earnings ratios has changed over the years.
Investors are reading CAPE all wrong.
A CAPE ratio of 26.91 does not prove the stock market is overpriced. The stock market today may be overpriced or underpriced. CAPE using a historic average as a benchmark just doesn’t tell us one way or another