This tag examines the valuation metrics of financial assets: equity risk premium, valuation multiples, credit spreads, relative richness across asset classes. It is not about predicting prices but about understanding what prices embed as assumptions on growth, inflation and risk. Valuation is a starting point, not a forecast.
Three equity valuation measures circulate continuously in financial commentary and are regularly conflated: the CAPE (P/E on 10-year real earnings), the trailing P/E (on GAAP earnings of the last 12 months) and the forward P/E (on consensus sell-side earnings projected…
Behind the acronym CAPE — Cyclically Adjusted Price-Earnings — sits a calculation of remarkable simplicity: real S&P 500 price as numerator, arithmetic mean of the previous ten years’ real earnings as denominator, double CPI deflation on both terms, series back-calculated…
An academic valuation ratio formalized by Robert Shiller in 1988 and popularized by Irrational Exuberance in 2000, the CAPE — S&P 500 price-to-earnings divided by the 10-year average of real earnings — concentrates since 1881 the most robust documented predictive…
Dividend yield alone underestimates what equity holders actually receive. Adding net buybacks reshuffles the comparison between US and European firms, and exposes companies that distribute through one channel while diluting through the other.
S&P 500 companies announced roughly $880 billion of buybacks in 2025. The total share count fell by only 0.8%. The gap is the entire story — and the only metric that captures it is net shareholder yield.
Wealth is not a stock — it is an estimate conditional on the cycle, the level of rates and market liquidity. The same assets can swing by 15 to 30% over a complete rate cycle without any change in their intrinsic quality.
Why this article matters This analysis breaks down AI-themed ETFs beyond the purely technological angle, by crossing flow dynamics, index architecture, and the macroeconomic environment. The point here is not to assess AI’s transformative potential, but to clarify the actual…
Earnings surprises in equities are now emerging as one of the earliest signals for reading the equity cycle at the start of 2026. They are no longer just quarterly noise but have become a structural indicator of the equity regime…
Interest rates do not cause an instantaneous rupture in financial markets. They gradually reshape valuation criteria, asset-allocation trade-offs and portfolio structures — a slow, cumulative, and uneven process. Markets do not react to rates — they reorganize around them. Movements…
