Butterwood argues in the Economist that the U.S. stock market is overvalued. At 32.8, the Cyclically adjusted price earnings ratio (CAPE) is certainly pricey. Perhaps that is one reason investors have backed off some of their love affair with FAANG stocks.
Buttonwood cites research by Research Affiliates, a fund-management group.
You can hear the authors of the research ("Cape Fear: Why CAPE Naysayers Are Wrong"), Rob Arnott Vitali Kalesnik Jim Masturzo, explain their thesis in in this video.
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