THE RECKONING
Wall Street’s oldest warning signal has spoken. The Shiller PE ratio has crossed 40, a level touched only three times in 154 years. December 1999 came first, followed by a 49% collapse. November 2021 came next, ending in a 25% drawdown. The third time is now—and you’re living inside it.
At 40, markets trade at 2.3× their long-term average. Stocks have been cheaper 98.9% of history. This isn’t a crash signal—it’s gravity. Valuations don’t predict timing; they predict limits. Vanguard data suggests future real returns near 1.6% annually through 2035.
The catalyst is unknown, but the fuel is everywhere. Recalibrate expectations. Diversification isn’t fear—it’s math.
The market isn’t broken. It’s priced for perfection in an imperfect world.
The clock has started. ⏳
