Stocks Aren’t as Pricey as This Ratio Suggests

by | May 11, 2017

Originally published on Bloomberg.com | May 11, 2017

In the 1962 thriller “Cape Fear,” an ex-convict, Max Cady, stalks the prosecutor who put him behind bars, seeking revenge. The film reaches its nerve-wracking climax on the shores of Cape Fear. In the nick of time, evil is thwarted and justice prevails.

Today, many equity investors are facing their own CAPE fear. Specifically, the S&P500 cyclically adjusted price-to-earnings ratio, known as CAPE, is approaching 30, just shy of its peak before Black Tuesday in October 1929. Continue Reading.

Filed Under: Economics

About the Author

Larry Hatheway has over 25 years’ experience as an economist and multi-asset investment professional. He is co-founder, with Alexander Friedman, of Jackson Hole Economics, a non-profit offering commentary and analysis on the global economy, matters of public policy, and capital markets. Larry is also the founder of HarborAdvisors, LLC, an investment advisory firm catering to family offices and institutional clients worldwide.

Previously, Larry worked at GAM Investments from 2015-2019 as Group Chief Economist and Global Head of Investment Solutions, where he was responsible for a team of 50 investment professionals managing over $10bn in assets. While at GAM, Larry authored numerous articles on the world economy, policy-making, and multi-asset investment strategy.

From 1992 until 2015 Larry worked at UBS Investment Bank as Chief Economist (2005-2015), Head of Global Asset Allocation (2001-2012), Global Head of Fixed Income and Currency Strategy (1998-2001), Chief Economist, Asia (1995-1998) and Senior International Economist (1992-1995). Larry is widely recognized for his appearances on Bloomberg TV, CNBC, the BBC, CNN, and other media outlets. He frequently publishes articles and opinion pieces for Bloomberg, Barron’s, and Project Syndicate, among others.

Larry holds a PhD in Economics from the University of Texas, an MA in International Studies from the Johns Hopkins University, and a BA in History and German from Whitman College. Larry is married with four grown children and resides with his wife in Redding, CT, alongside their dog, chickens, bees, and a few ‘loaner’ sheep and goats.

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