WHAT IS CAPE RATIO SHILLER P/E RATIO? (EASIEST EXPLANATION) Straight to the Point скачать в хорошем качестве

WHAT IS CAPE RATIO SHILLER P/E RATIO? (EASIEST EXPLANATION) Straight to the Point

In around two minutes you will know what is CAPE Ratio. You will get both professional definition and easy explanation. No intro, no outro, straight to the point. ► My 215 Companies Watchlist: https://bit.ly/3cbWL3f ► The Best Books about Investing: https://www.amazon.ca/shop/artemdikarev ► Get $10 for Opening an Account with Wealthsimple: https://bit.ly/3kzztaD ► Get $25 from Newton (Canada): https://web.newton.co/r/BP8LC6 ► Get $10 in Bitcoin from BlockFi: https://blockfi.com/?ref=ebccda0d ► Get $10 from Coinbase: https://www.coinbase.com/join/dikare_1 ► Download my FREE eBook about Investments: https://bit.ly/2FL2UHI ► Follow Me On Instagram:   / artemdkrv   CAPE ratio is the Cyclically Adjusted P/E Ratio. It is also known as Shiller P/E ratio. It uses average earnings per share adjusted for inflation for the last 10 years in its formula. And if you are not sure what p/e ratio or inflation means, feel free to watch one of my previous videos. The main difference between classic and Shiller p/e ratio is the kind of EPS that is used. For classic trailing p/e ratio, earnings per share for the most recent 4 quarters are used. But in case of Shiller p/e ratio, eps for the last 10 years are summarized and divided by the number of periods, which is 10, in order to find 10-year average EPS number. This number is also adjusted for the inflation. The idea of finding Shiller p/e ratio is that it allows to smooth out the fluctuations that earnings had during such a long period of time. There are good and bad moments for any company. And almost every company experiences one or another, or even both in this 10-year period. CAPE ratio allows to see more real and stable p/e ratio. While traditional p/e ratio might be severely affected by company’s most recent events. If a company has a very bad year, but its share prices stay relatively the same, the p/e ratio will skyrocket. And the opposite is true. If a company suddenly increases its earnings per share, then p/e ratio might suddenly drop. Potentially, even to a single digit number. Such short-term fluctuations might not reflect the real picture of a company’s financial health. That is why Shiller, or CAPE ratio might be more helpful. Additionally, Shiller p/e ratio is extremely important for cyclical companies. Which profits might differ greatly because of different economic cycles. If you find my content interesting, please consider subscribing to my channel. It helps a lot as a beginner creator. And let me know if there is anything you would like to know about personal finances and investing. *None of this is meant to be construed as investment advice, it's for entertainment purposes only. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.