Market Signal
Current Stock Prices
Status
High Risk
Current Shiller PE
CAPE Ratio
As of Sep 21, 2026
Deviation
+134%vs 17.75 mean
CAPE Risk Range
Velocity Indicator
Risk Level
Extreme
134% Valuation Gap
Mean vs Current Comparison
Risk Projection
“Extreme valuations do not predict when a market turns. They have been remarkably consistent about how much is given back when it does.”
Times CAPE Crossed 40
In 1929, 2000, and 2021, every prior crossing of this threshold was followed by a decline of 25% to 49%. Three for three in 156 years. CAPE has never told anyone the date — only the distance.
Risk Recommendation
Extreme risk protocol active
Primary Action
Move To Cash
Secondary Directive
Lock In Retirement Income
System Status
Capital Preservation Mode
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Historic Boom & Bust Cycles
The Trillions Trifecta
The Market Distortion Loop
- 01
Government Policy & QE
De-risks tech manufacturing and injects liquidity through regulatory shields and security mandates.
- 02
AI Expansion Hype
Drives hyper-growth narratives and investor euphoria, pushing valuations away from underlying earnings.
- 03
Data Centre Infrastructure
A physical buildout consuming capex, energy and chips — funnelling capital back into the market’s largest stocks.
The Result
“An unusual alignment of national security policy, corporate capital spending, and technology narrative — all pushing the same handful of prices in the same direction.”
Historical Crash Comparison
Every cycle where CAPE closed above 40.0
| Bubble Era | Peak Shiller P/E | Subsequent Decline | Recovery Duration | Status |
|---|---|---|---|---|
| Dot-com Bubble (2000) | 44.19 | −49% | 7.2 Years | Regressed |
| Post-Pandemic Peak (2021) | 40.0+ | −25% | 2.1 Years | Regressed |
| Current Active Cycle (2026) | 41.52 | In Progress | Active | Critical Alert |
Market Education
5 Reasons You Should Care About The Shiller CAPE Ratio
The Ultimate Valuation Compass
Introduced in 1988 by economists Robert Shiller and John Campbell, the Cyclically Adjusted Price-to-Earnings ratio smooths ten years of inflation-adjusted earnings to show whether stocks are cheap or dangerously expensive — without the distortion a single bad quarter creates.
Built On 150 Years Of History
CAPE is trusted because it neutralizes short-term noise across a dataset stretching back to 1871. It has been measured through the Panic of 1873, the Great Depression, two world wars, stagflation, and every bubble since.
The Danger Zone Threshold
A CAPE above 40 has always signalled extreme overvaluation. It does not tell you when the market turns. It has been remarkably consistent about how far it falls when it does.
A Rare Precedent
CAPE has crossed 40 in only three episodes in 156 years. In the two that have already resolved, the market gave back between 25% and 49% — and took between 2 and 7 years to recover.
Extreme Historical Deviation
The long-run average since 1881 is 17.75. Every point above that is a claim about future earnings that has to come true for today’s price to make sense.