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Meb Faber - Quant Savant

The Business Brew

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Cape Ratios and Valuations Are Not the Same

When cape ratios are high, critics abound. They come out of the woodwork to get angry when you talk about stocks. But there's plenty of times other countries have been expensive. The average rae returns is zero. An about a quarter or a third of the cases that the returns were positive. And so as stocks get more expensive, future returns are likely to get worse.

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