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Thursday, November 27, 2025 | 11:28 PM ISTहिंदी में पढें
CAPE fear: History suggests rich valuations precede sharp pullbacks
Valuations at current levels have historically corresponded single-digit returns
 "The study suggests a direct relationship between CAPE values and drawdowns. Drawdowns are the maximum decline from the peak.")
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The study suggests a direct relationship between CAPE values and drawdowns. Drawdowns are the maximum decline from the peak. (Illustration: Binay Sinha).
Notwithstanding indices being lower than the all-time high levels touched nine months ago, the stock market has rarely been as expensive as it is now on one particular metric.
The 10-year cyclically adjusted price-to-earnings (CAPE) ratio for the BSE Sensex is at 35.2x, according to data based on a study, Forecast or Fallacy? Shiller’s CAPE: Market and Style Factor Forward Returns in Indian Equities, authored originally in July 2024 by Joshy Jacob, professor at the Indian Institute of Management, Ahmedabad, and Rajan Raju, director at Singapore-based family office Invespar.
The numbers are updated monthly. The latest valuations for May 2025
Topics : Stock Market The Smart Investor Markets
