Post #8453 by Aussi on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)

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For example, if you take all of the points in the past in which the market was at an all time high, and then sorted them into return deciles ranked by the CAPE, you will likely find that the 5-year returns (when starting from a market high) are very sensitive to the starting CAPE ratio. The 5-year returns starting from market highs, but the CAPE ratio in the upper 3% range will, will almost by definition, have resulted in significantly negative real returns.

A good point worth investigating.

So I can check, is the algorithm not to invest when the CAPE is in the upper 3% range and funds should be invested when it drops below the 3% range, or should the funds be invested at a much lower CAPE. Is there a sell criteria such that you get out of the market when the CAPE exceeds 97% of previous values?

Aussi who is in search of historical CAPE values.

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