CAPE
DoubleLine Shiller CAPE U.S. Equities ETF
stock NYSE ETF

Yeah idk, if buybacks really affected CAPE that much, we'd see a big divergence between trailing numbers and the cyclical numbers. Like if CAPE were 40x and PE were 15x, that would be one thing. But we're not seeing that.
Number 2 is just how it work. It's not unique to history.
Number 3 is very valid, and I've written about it in the past.
[Covid money printing effect on CAPE](https://riskpremium.substack.com/p/fixing-cape-does-liquidity-matter)
That is something that i think has mostly worked it's way through at this point.

Shiller CAPE specifically is very outdated and at an all-time high literally 95%+ of the time.
1. Buybacks skew how CAPE views equally profitable enterprises because it's based on net earnings.
2. 10 years is now far too long for a lookback in a faster-moving tech economy. Google just made $130B but its 10-year average is $53B. I don't think even the most bearish investor believes Google revenue is falling to $53B anytime soon. Trillion-dollar rapidly growing businesses didn't exist in 1988.
3. 10 year CAPE is still a bit out of wack from the COVID years right now

For context, here are some 2025 numbers.
**Amazon 2025 Quarterly Operating Cash Flow**
**Q1 2025:** $32.52 billion
**Q2 2025:** $35.53 billion
**Q3 2025:** $54.46 billion
**Q4 2025:** $26.03 billion
(Gemini referring to AWS financial reports in 2025)
You have to add substantial infrastructure AI/Data center investments, impacting cash flow in 2025 (and 2026).
Also note numbers are aggregated across branches, while tarrifs only impacted certain parts of AWS.
So is 600 million a lot? I was curious and got to above. I’m not sure if it’s even meaningful to assess. I think the point about funelling money from citizens to companies seems too brittle - so many things has and could have gone wrong if this was a deliberate move from the Trump administration, and I honestly can’t give them credit to think up any such plan in the first place. 600 million in AWS context seems like a blip and a footnote in a quarterly report, no?
Did you know that in other countries, goverment bodies are communicating that companies must keep track of tarrif expenses, because they will be eligible for compensation. If you want to look it up check out the CAPE portal. I don’t think it’s entirely clear for average US citizens how big of mistake this was.

Yeah idk, if buybacks really affected CAPE that much, we'd see a big divergence between trailing numbers and the cyclical numbers. Like if CAPE were 40x and PE were 15x, that would be one thing. But we're not seeing that.
Number 2 is just how it work. It's not unique to history.
Number 3 is very valid, and I've written about it in the past.
[Covid money printing effect on CAPE](https://riskpremium.substack.com/p/fixing-cape-does-liquidity-matter)
That is something that i think has mostly worked it's way through at this point.

Shiller CAPE specifically is very outdated and at an all-time high literally 95%+ of the time.
1. Buybacks skew how CAPE views equally profitable enterprises because it's based on net earnings.
2. 10 years is now far too long for a lookback in a faster-moving tech economy. Google just made $130B but its 10-year average is $53B. I don't think even the most bearish investor believes Google revenue is falling to $53B anytime soon. Trillion-dollar rapidly growing businesses didn't exist in 1988.
3. 10 year CAPE is still a bit out of wack from the COVID years right now

For context, here are some 2025 numbers.
**Amazon 2025 Quarterly Operating Cash Flow**
**Q1 2025:** $32.52 billion
**Q2 2025:** $35.53 billion
**Q3 2025:** $54.46 billion
**Q4 2025:** $26.03 billion
(Gemini referring to AWS financial reports in 2025)
You have to add substantial infrastructure AI/Data center investments, impacting cash flow in 2025 (and 2026).
Also note numbers are aggregated across branches, while tarrifs only impacted certain parts of AWS.
So is 600 million a lot? I was curious and got to above. I’m not sure if it’s even meaningful to assess. I think the point about funelling money from citizens to companies seems too brittle - so many things has and could have gone wrong if this was a deliberate move from the Trump administration, and I honestly can’t give them credit to think up any such plan in the first place. 600 million in AWS context seems like a blip and a footnote in a quarterly report, no?
Did you know that in other countries, goverment bodies are communicating that companies must keep track of tarrif expenses, because they will be eligible for compensation. If you want to look it up check out the CAPE portal. I don’t think it’s entirely clear for average US citizens how big of mistake this was.

> As Bogleheads, are we supposed to completely ignore valuations, stay the course, and keep owning the entire market?
As a long-time Boglehead who invested through another high CAPE ratio time (late 1990's dot com), my reply would be that the "entire market" is not the S&P 500. Meaning don't forget about ex-US stocks and fixed income. I wouldn't try to use these valuation ratios as some sort of timing signal to completely switch from 1 asset class to another ("the market can remain irrational longer than you can stay solvent"). But if the S&P 500 gets even more expensive on a PE ratio basis compared to US Treasuries, that would lead me into rebalancing out of (presumably) large cap US and into bonds to maintain my chosen asset allocation percentages.

That makes sense. Do you have an answer for the first question? Why did US stock valuations increase so much over the past century?
The CAPE went from 5 at one point in the 1900s to 40 today. Hypothetically, let’s say the Shiller CAPE eventually did reach 100 in the year 2100 (or even higher in the future). As Bogleheads, are we supposed to completely ignore valuations, stay the course, and keep owning the entire market?