Market and economic structures can shift, undercutting a key basis for using historical data to make predictions
On this basis it could be argued that, at that time, since expected returns were well below historic norms, prices were too high.
CAPE is ignorant of interest rates
In such an environment, many investors actually consider investments they are making are low risk when, in fact, they are higher risk.
Wrap up on the drawbacks of CAPE. A fair level for price earnings ratios has changed over the years.