The **Cyclically Adjusted Price to Earnings Ratio**, also known as **CAPE** or the **Shiller PE Ratio**, is a measurement from Robert Shiller. It adjusts past company earnings by inflation to present a *snapshot of stock market affordability* at a given point in time.

This page contains a Shiller PE ratio which calculates the number for the last 10 years. It allows you to calculate a custom CAPE for any timeframe between *1 month* and *50 years*. Export your work to csv and take this data to a spreadsheet or stats program for further research.

(For the most recent date, see the S&P 500 Return Calculator)

## CAPE Ratio Calculator

## The Shiller PE

Robert Shiller first proposed a ten year timeframe for his *CAPE* ratio, targeting it towards the S&P 500 - the most well known American stock index. Subsequently, CAPE has been adapted for a number of other countries and indexes.

The *Shiller PE* is a valuation measure, much like its cousin the price to earnings ratio. However, the *Shiller PE* tries to work around the shortcomings of the current PE ratio – either inappropriate earnings or over or undervaluation. It does this by averaging results over a longer time frame.

This process means neither *temporary* dips in earnings (for example during the Great Recession) nor investor over-optimism (say, during the Tech Bubble) or over-pessimism will be inappropriately weighted on market valuations.

We first discussed the Shiller PE ratio in 2013, but suffice to say it's a long term valuation metric which, even when running 'hot', may take many years to find balance again. (if it ever finds balance.)

Additionally, as it is a ratio, CAPE suffers from a few effects inherent to... math. Small numbers in the denominator increase its sensitivity -– prolonged periods of low or high earnings have large effects (unless, of course, those earnings are the 'new normal').

At a glance, you can't tell if prices or earnings are dominating – but the coarseness of the measurement is its strength. By removing your ability to justify a valuation, it forces you to consider what a high or a low number means.

Since all numbers are additionally adjusted by averaging over a timeframe, hopefully any temporary effects cancel out in the window examined.

In other words, it's not as clumsy or as random as other valuations like the 12 month P/E – it's a more elegant valuation measure for a more civilized investor.

*Looking for something similar?* The closest proxy is the S&P 500 Price to Peak Earnings ratio, which also introduces earnings 'memory' to valuation. It's comparable to the so-called Buffett Indicator, a ratio of stock market capitalization to GDP. Also look at Tobin's Q ratio, an estimate of stock market valuation versus replacement cost.

## Sources of the Shiller PE and CAPE Ratio Calculator

Thank you to Robert Shiller, for providing his monthly data on the S&P 500. Please see his site for an explanation of the calculation of the ratio.

All data internal to the tool is monthly, while earnings data is **quarterly**. Earnings data will lag the published dates – in those cases we 'carry forward' the last known earnings.

The methodology on the calculator itself is the same as listed on our other S&P 500 calculators - (technically, it even uses the exact same data file they are pointing to!). That link will show the most recent month's notes.