WarrenCo

The Living Intelligent Investor

Real S&P 500 and the Shiller Excess CAPE Yield, 1970 to today. A regime thermometer for the equity premium on offer.

Top panel. S&P 500, monthly, deflated to current dollars so a dollar in 1970 and a dollar in 2026 line up on the same axis. Log scale — equal vertical distance equals equal percentage change. Tan dashed line is a log-linear least-squares fit through the entire window; its slope is the long-run real return of the index. Bottom panel. Shiller Excess CAPE Yield = (1 / CAPE) − (10-yr Treasury yield − trailing 10-yr CPI inflation). Higher = stocks attractive vs. bonds. The current reading and its percentile rank since 1970 sit in the upper right. Tan bands span both panels at NBER-dated recessions. Vertical gray lines mark each decade boundary. Sources: Robert Shiller's monthly archive (shillerdata.com); NBER recession dates via FRED.