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The claim that the stock market is about to do something “for the first time in 156 years” refers to the Shiller price-to-earnings ratio, or CAPE, potentially exceeding its reported December 1999 peak. The Motley Fool reported a CAPE reading of 41.67 at the October 5, 2026 close, compared with a prior peak of 44.19 in December 1999. That is a notable valuation comparison, not a countdown to a crash: CAPE can help frame long-run return expectations, but it cannot say when a market decline will begin.
What the “156 years” claim means
The Shiller price-to-earnings ratio—also called the cyclically adjusted price-to-earnings ratio, or CAPE—compares a stock-market price index with a ten-year average of inflation-adjusted earnings. Using a decade of real earnings smooths out some of the temporary swings that can make a one-year price-to-earnings ratio misleading.
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The historical record behind the 156-year description is not a 156-year history of a modern S&P 500 index fund. Robert Shiller’s Yale data page says the monthly stock-price, dividend, earnings and consumer-price-index series used for the historical dataset begins in January 1871. It is reconstructed market data, not an investable index with a continuous 156-year trading history. Yale’s Shiller data page describes the series and its historical scope.
How close is CAPE to its reported dot-com-era peak?
The Motley Fool reported a Shiller CAPE of 41.67 at the October 5, 2026 close and identified 44.19 in December 1999 as the previous high. The same article reported a long-run average CAPE of 17.42, without specifying the averaging convention in that passage. These are figures reported by that article, not independently recalculated here. The Motley Fool’s October 11, 2026 article supplies the readings and comparison.
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A reading near a historical extreme signals that prices are high relative to the measure’s smoothed earnings base. It does not establish that prices must fall immediately, or that a particular decline will have the same cause or scale as a past one.
What past high-CAPE episodes show
The Motley Fool article notes high CAPE readings before several sharp market declines. It reports that the first reading above 30 came in August–September 1929, before the Great Depression; that CAPE reached its prior peak in December 1999 before the dot-com bust; and that elevated readings also preceded the fourth-quarter 2018 decline and the February–March 2020 pandemic crash. Sequence is not proof that valuation alone caused any of those losses.
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- The article reports that the Dow Jones Industrial Average fell 89% peak to trough during the Great Depression. That is a reported index loss, not a forecast for what a high CAPE reading implies today.
- It reports an approximately 20% S&P 500 decline in the fourth quarter of 2018, and a 34% S&P 500 loss over 33 calendar days in the February–March 2020 crash.
- After the dot-com peak, the article reports losses by October 2002 of 49% for the S&P 500 and 78% for the Nasdaq Composite.
These episodes involved different economic conditions and shocks. A valuation measure cannot isolate the roles of monetary policy, earnings, inflation, economic disruptions or other forces, and the examples do not establish a threshold that reliably triggers an imminent crash.
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CAPE is best treated as a valuation indicator with a long horizon, not a near-term market-timing signal. Campbell and Shiller’s 2001 paper found that valuation ratios did poorly overall at forecasting future dividend growth, earnings growth or productivity growth, while appearing useful primarily for forecasting future stock-price changes. That is evidence about forecasting relationships; it does not provide a precise date for a correction or crash. The paper’s abstract sets out that distinction.
There are also methodological nuances in comparing CAPE across eras. Yale’s data page cautions that payout-policy changes—particularly the increased use of share repurchases rather than dividends—can affect CAPE through earnings-per-share growth. Shiller describes an alternative total-return CAPE that reinvests dividends and adjusts earnings. A long historical series is useful context, but its readings are not immune to changes in how companies distribute capital.
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Valuation can inform expectations about returns over long periods without telling investors when a market will turn. The Motley Fool article relays Bespoke Investment Group’s analysis of 27 S&P 500 market events: bear markets averaged 286 calendar days from start to trough, and the longest in its described 97-year set lasted 630 days. It also reports an average bull-market duration of 1,023 calendar days, with 14 of the 27 bull markets lasting longer than that longest bear market. These historical duration figures describe the analyzed sample; they do not schedule the next change in direction.
The same article reports Crestmont Research’s finding that all 107 rolling 20-year periods from 1900–1919 through 2006–2025 had positive average annual total returns, including dividends. That historical record is not a guarantee of future returns, and a positive long-horizon result does not rule out severe losses along the way.
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Clear out junk files and repair common Windows errorsFree Scan →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →For a personal-finance decision, the practical distinction is between recognizing valuation risk and trying to time a crash. CAPE can be one input when thinking about long-run expected returns. On its own, it does not tell an investor to sell, buy, or wait for a specific market level.
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