Shiller CAPE Tops 32 for 5th Time Since 1871, Flashing S&P 500 Warning

1 articles · Updated · The Motley Fool · Jul 19

The Shiller S&P 500 CAPE ratio has climbed above 32 again, marking only the fifth such reading since 1871 and reviving a valuation warning tied to past market setbacks.
Earlier spikes near 32 preceded the 1929 crash, the 2000 dot-com bust and a 19% S&P 500 drop in 2022; the 2017 episode led to a late-2018 correction rather than a full crash.
Two stocks highlighted as survivors across every prior episode are Coca-Cola and Procter & Gamble, whose businesses and dividends held up through downturns.
Coca-Cola has raised its dividend for 64 straight years and P&G for 70; a $10,000 investment in either stock in 1990 would now exceed $400,000 with dividends reinvested.
The broader takeaway is that extreme valuations can persist before mean reversion hits, while durable blue-chip companies have historically weathered the sell-offs best.