The stock market is flashing a valuation warning it has only issued twice in recorded financial history. The Shiller CAPE ratio — the cyclically adjusted price-to-earnings ratio — has now crossed 40. According to data published on multpl.com, which tracks Robert Shiller's official series, the May 2026 reading sits around 41.6. The long-term mean since 1881 is approximately 17.3. A CAPE above 40 has only been recorded twice before. Those two prior instances were 1929 and 1999. Both were followed by crashes that defined a generation of investors.
That is not a coincidence. That is a pattern.
