Trading Country Stock Markets Based on Relative P/E10
September 4, 2012 - Fundamental Valuation
Is it practical to compare valuations of different stock markets? In his August 2012 paper entitled “Global Value: Building Trading Models with the 10 Year CAPE”, Mebane Faber investigates the usefulness of 10-year cyclically adjusted price-to-earnings ratio (CAPE, or P/E10) in determining relative values for 32 country stock markets. Specifically, he ranks all country markets based… Keep Reading