Do you have tables for the Cape-Schiller past 23.99 or do we just assume anything past that is 4.7%? The current ratio is 38.94, so not really sure what to do. Also, do you have a simple worksheet or webpage that people input their own numbers and computer things based on your book (without holding you liable, of course). Thank you in advance and really enjoying your book.  M.

Dear M,

Thanks for your note and your interest in my research.

High Shiller CAPES have been a sticking point in my analysis until recently. There are precious few historical examples of 38 or more. I am suspicious of drawing conclusions from such limited data.

Recently, I found a curve that fits the data even better than the ones I used in my book. I intend to update my charts and tables on my website with these new charts. Here is an example, for a tax-advantaged account with no legacy, and a 35 year planning horizon and moderate inflation. This chart indicates that at current Shiller CAPE levels, 5.5% is a reasonable SAFEMAX. Once again, since there is little data, one must be prepared to make adjustments. Sorry for the poor image quality. It will be much better when I post it to the website.

 

 

Best regards, Bill Bengen