No. of Recommendations: 1
I haven’t had a chance to try replicating the simulation, but there is a fundamental issue I believe is unaddressed:
1950 is close to a CAPE low; July 2024 close to a CAPE peak.
If we’re testing a a timing model that takes CAPE as its guide, we’d want neutral starting and endpoints. As is, both the points chosen would undersell CAPE-based timing, and inflate the S&P results, comparatively speaking. Briefly, we’re looking at the results from a climb from CAPE trough to CAPE peak, historically speaking. Right?
