Shiller Yield Gap Shows U.S. Stock Valuations Make Sense
“Stock-market valuations may not be as absurd as some people think,” Yale University Professor Robert J. Shiller wrote Monday in a commentary for the Project Syndicate website. Shiller and co-authors Laurence Black and Farouk Jivraj cited the excess CAPE yield, a gauge that reflects average earnings for the previous 10 years and inflation-adjusted bond yields. U.S. stocks offered 3.9 percentage points more yield than bonds in November, according to data compiled by Shiller. The gap, or excess yield, was in line with its monthly average of 3.8 points since December 1970.