Subject: Re: Just to be provocative
If you calculate and plot the forward, 10-year return on the same chart as CAPE, you get a saw-tooth curve like the CAPE plot, but inverted, with forward returns low when CAPE is high. Earnings have grown more-or less smoothly since 1945, but P/Es and returns have moved up and down dramatically in a saw tooth pattern. Sort of a 30-ish year K-wave?