Markets · Issue 02
CAPE is 42. It has only been higher once.
Shiller via Multpl: January 2000 43.8, the record 44.2 in December 1999. 2 September 2026: 41.93. January 2009: 15.2. A high CAPE is not a crash date. 2007’s crash arrived from 27.
- Shiller CAPE, 2 Sep 2026 (Multpl)
- 41.93
- Record, Dec 1999
- 44.19
- Long-run mean (Multpl)
- 17.4
- 1 Jan 2009
- 15.2
Second-highest is not a date
Multpl, reprinting Shiller: the cyclically adjusted P/E touched 44.19 in December 1999. On 2 September 2026 it was 41.93. The January 1 series on this wall is 39.65 for 2026 and 43.77 for 2000. The long-run mean is 17.4. That is the whole valuation paragraph. It is not a crash. 2007’s January print was 27.21 — cheap next to 2000, and then the S&P fell 57% because the banking system did. 2022 left from 36.94 and fell 25%. High CAPE widens the range of bad outcomes. It does not timestamp them.
The crash desk is the other axis
Pair this with Deeper takes longer. Depth and wait are history. CAPE is the starting multiple. 1929 is not on this CAPE line because the January 1929 Multpl print is 27.08 — not the September peak, and we will not pretend a January 1 is a crash-eve print. Own both pages. Do not collapse them into ‘the market is expensive so it will crash 57%.’ Expensive is 42. Crash is a close.
The long view is a multiple, not a month
A 10-year real return from CAPE 42 has been poor in Shiller’s own scatter, on average. Averages hide 1995 and 2009. What would change this page: a January 1 CAPE back under 25, or a new 20% episode that we can finally put on the crash wall. Until then 42 is the number, and 1929 is still the other number.
Investing lens
Horizon 10–15 years · Educational, not advice
CAPE 42 is a statement about prospective real returns, not about next quarter’s close. Hold a crash playbook because 2007 launched from 27, and hold lower return assumptions because 42 is not 17.
Where the map points
- A lower assumed 10-year real equity return than the 2010s
- The crash bubble’s 48-month clock, independent of CAPE
- Avoid a 2026 ‘it must crash this year’ calendar
- Quality cash-flow over multiple expansion
What can break it
- A further multiple expansion that makes 42 look early
- A crash from 42 that is 2000-shaped (years) not 2020-shaped (weeks)
- Using January 1 CAPE as if it were the peak print
CHART does not recommend securities, funds or trades. Figures can be revised by their publishers. Do your own research and consider regulated advice before allocating capital.
Sources
Every headline number traces to a named publisher. Contextual sources inform the essay, not the key stat.
- 01PrimaryMultpl (Shiller)2026-09-02Shiller PE Ratio
CAPE 41.93 on 2 Sep 2026. Record 44.19 in Dec 1999. Long-run mean 17.40.
- 02PrimaryMultpl2026Shiller PE Ratio by Year
January 1 prints used on the CAPE line: 2000 43.77; 2007 27.21; 2009 15.17; 2026 39.65.
- 03PrimaryRobert Shiller2026U.S. Stock Markets 1871–Present
Underlying CAPE series Multpl reprints.
Keep reading
The deeper the crash, the longer the wait. Except twice.
S&P 500 price, peak to trough versus months from the low back to the old high. 1929 is a different animal. 2020 is the other exception: −34% and whole in five months. 2022 was −25% and fifteen. There is no 2026 crash on this wall.
5 mo
2020: trough to prior peak (price)
Minus 86, then 57, then 49. The modern crash is not 1929.
S&P 500 cycle drawdowns, price. 1929–32 −86.2%. 2007–09 −56.8%. 2000–02 −49.1%. 2020 −33.9%. 2022 −25.4%. Hartford’s 20% census averages −35%. That average is a slice, not the Depression.
−56.8%
GFC, 9 Oct 2007 – 9 Mar 2009
The year stocks and bonds occupied the same quadrant
Each bubble is a calendar year. X is Damodaran’s S&P total return. Y is his 10-year Treasury. Size is gold. 2008 is the upper-left hedge. 2022 sits on the 45-degree line, both down 18%.
−18.0 / −17.8
S&P and 10-year Treasuries, 2022
2022 is the worst 60/40 since 1937. 2008 was kinder.
Damodaran S&P 60 / 10-year Treasury 40, calendar years. 1931 −27.3%. 1937 −20.7%. 2022 −18.0%. 2008 only −13.9%, because the 40% returned +20%. The worse equity year was not the worse mix.
−18.0%
60/40 in 2022, Damodaran splice
The $348 trillion ledger
Private and public debt set a record in 2025. Sovereign debt is heading back to 100% of world GDP — earlier than the IMF thought.
$348 tn
Global debt stock, end-2025 (IIF)