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Investment Strategies / Mechanical Investing
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Author: lizgdal ✶🐝  😊 😞
Number: of 5383 
Subject: Re: Is Morningstar dishonest?
Date: 12/18/25 1:29 PM
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No. of Recommendations: 4
The Shiller CAPE data is more consistent over time with an adjustment: double the earnings starting in 1991.

Average CAEY is much lower recently (CAEY is 1/CAPE):
From   To   years  Avg    SD
1871  1989   119   7.7%  3.0%
1990  2025    36   3.9%  1.0%


Average CAEYb is about the same (CAEYb is CAEY with earnings doubled starting in 1991):
From   To   years  Avg    SD
1871  1989   119   7.7%  3.0%
1990  2025    36   7.7%  1.9%


Dividing into 5 buckets based on CAEYb, from 1960 to 2015 the 1-year total subsequent returns (not adjusted for inflation) were similar to what mungofitch posted:

         lizgdal   mungofitch
qCAEYb  1960-2015  1960-2018
  4       18.7%      18.7%
  3       10.1%      13.1%
  2       10.1%       7.8%
  1       10.6%       7.6%
  0       6.5%        3.1%
  avg     11.2%      10.1%
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