STI Close: 3138,04
PE10: 14.13

The bigger news about PE10 or CAPE (in Professor Robert Shiller’s terms) is that Shiller was just awarded the Nobel prize in Economic Science for his work in showing that asset prices are ‘predictable’ in the long-run in that they tend to follow a pattern of reverting back to some multiple of earnings or dividends. i.e. in the long run, fundamentals do matter. In the short-run, i.e. weeks, days, months or even a year or two, it is utterly useless to try and outguess the market.

On another note, Teh Hooi Ling’s article in the Sunday Times last week (dated 13 Oct 2013) touched on the STI CAPE and where we are now. I note that her calculation of CAPE (as well as the long term averages) concurs with mine so I’m pretty sure that the data that I got earlier was sound and that my updates (via Bloomberg) are ok too (Unless of course, we are BOTH wrong!).

For more background on STI PE. See here as well as all subsequent updates.

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