Market Valuation

The Market Valuation gauge answers "how expensive is the U.S. stock market today, by historical standards?" We average four long-horizon valuation models that look at price relative to a structural anchor — earnings, GDP, a fitted long-run price trend, or the 10-year Treasury yield. Each input is converted to a percentile against its own history — CAPE, the Buffett Indicator and Mean Reversion score their distance from a fitted long-run trend rather than the raw level, each month ranked against only the history available up to that month — then equal-weighted. A high score means today sits in the expensive tail across multiple lenses — single-model bubbles don't lift the gauge on their own.