The Shiller PE, or 10-year cyclically adjusted P/E (CAPE) ratio, has been found to strongly correlate with long-term average future returns at the market level.
I recently examined historic global CAPE ratio data from multiple stock market indices (obtained from a paywalled dataset available online from Siblis financial research), calculated each index’s mean and standard deviation CAPE ratio over the course of the 21st century to date (and again just looking at the past 10 years), and expressed that index’s current CAPE as of end of December 2025 in terms of standard deviations away from its historic mean. I am not posting the results directly here because the company’s terms of use forbid public data-sharing, but you can go pay the $100 and run these numbers in Excel yourself very easily. What I will share are some interesting findings:
\- Small cap looks like the best-valued segment of US markets right now by a wide margin (even better than large/mid cap value), which I’d guess relates to investors seeing tariffs being particularly punishing for US small caps’ supply chains
\- Lots of Europe (eg Switzerland, Sweden, The Netherlands, France) looks historically attractive even after ex-US’s recent runup; parts of Southeast Asia (Hong Kong, Thailand, the Philippines) and Latin America (Mexico, Brazil) look attractive too
\- Taiwan, SK, and US large cap all look very rich right now (no surprise, they are exploding with the AI trade)
Obviously, this isn’t the only thing you should look at when deciding where to invest your money (and this is not investment advice) - but I figured it might be a useful early screen and that folks might appreciate these findings given the glut of posts about whether the US is in an AI bubble.