Thanks for this. I think a major flaw with the Shiller P/E is that there is no fundamental reason for choosing 10 years of earnings for the calculation. Why n

Thanks for this. I think a major flaw with the Shiller P/E is that there is no fundamental reason for choosing 10 years of earnings for the calculation. Why not 7, or 12? When events like 2008 happen, and earnings drop tremendously and temporarily, it puts a serious skew on the metric going forward (until that single year is no longer used in the calculation). It is, however, a useful tool for "guesstimating" whether future stock markets returns will be above or below historical averages.