Graham/Shiller PE-10
I wholeheartedly agree with GEOV and would like to see the PE-10 data updated and maintained each week, if possible. That would be great!
I don’t understand what you mean, David. Why would the S&P 500 not have an earning record prior to 1999? Or am I missing something?
Standard & Poor’s was founded in 1860 and created a “Composite Index” as their original index. The “Composite Index” was renamed and introduced as the “S&P 500 Index” in 1923. The S&P 500 wasn’t composed of a full 500 stocks until 1957, but predecessor companies were assigned retroactively, to make the index representative of the early years. It’s something akin to what P123 does in extending ETFs back earlier than their actual inception by creating ‘synthetic’ prices based on the underlying index.
The real name of the ‘PE-10’ should be the “Graham/Shiller PE-10” and Shiller rightly and honorably gives credit to Benjamin Graham, author of “The Intelligent Investor” (he was also Warren Buffett’s mentor) as the originator of the PE-10 concept all the way back in 1943. I remember reading Graham’s advice about the prudence of using five and 10-year, inflation-adjusted earnings averages all the way back in the mid-1970s when I first opened “The Intelligent Investor” at 16.
In fact, in the latest edition of The Intelligent Investor (end of 3rd Chapter): “Robert Shiller, a finance professor at Yale University, says Graham inspired his valuation approach: Shiller compares the current price of the Standard & Poor’s 500-stock index against average corporate profits over the past 10 years (after inflation). By scanning the historical record, Shiller has shown that when his ratio goes well above 20, the market usually delivers poor returns afterward; when it drops well below 10, stocks typically produce handsome gains down the road.”
• MULTPL.COM’s PE-10 RESOURCES
Multpl.com has a plethora of accurate data sets extending back more than a century for dozens of theories – including each of the components that comprise the Graham/Schiller PE-10 back to 1871, including everything listed here.
• S&P 500 Annual Earnings to 1871: [color=royalblue]https://www.multpl.com/s-p-500-earnings/table/by-year[/color]
• S&P 500 Monthly Earnings to 1871: [color=royalblue]https://www.multpl.com/s-p-500-earnings/table/by-month[/color]
• S&P 500 Historical Prices Annual and by Month to 1871: [color=royalblue]https://www.multpl.com/s-p-500-historical-prices/table/by-year[/color]
• The Graham/Shiller PE-10 is presented (monthly or annual prices to 1871) here: [color=royalblue]https://www.multpl.com/shiller-pe[/color]
Chris