Really, I cannot for the life of me understand why people think CAPE is useful for anything. As John, Jeremy Siegel, Laurence Siegel, and literally dozens of others point out, the calculation of this historical series is fraught with potential problems. Then, the concept of mushing these numbers together, averaging them over 140 years or so, and coming up with something valuable/predictive strikes me as total lunacy. You cannot even compare the S&P multiple of today with ten years ago, not to mention a time when the US economy was all railroads and utilities. The underlying world changes too much.

As John says, please let me know in advance the "correct level of CAPE"--and good luck with that.

Ultimately, it is just another canard from those who think that if they just crunch enough numbers or think hard enough, they can add impose order on the total chaos that is the "stock market." It simply doesn't work that way, not in 1916, 1966, or 2016.

CAPE has probably been the costliest creation ever, having kept so many people out of equities with its long term bearish silliness. I understand the appeal of the original exercise, but please just give it up once and for all. There is no "market" indicator of value, now or ever.