Stock Market - Bubbly
Stock Market – Bubbly
We can answer the bubble question with help from our good friend, Robert Shiller. Shiller is the creator of the Cyclically-Adjusted Price-to-Earnings Ratio (CAPE). He’s been calculating CAPE for decades now. Basically taking a simple price-to-earnings ratio compares how much one share costs with how much it earns. A share that costs $200, and earns $10 a year, has a P/E of 20x. It’s not perfect,…
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