Professor Robert Shiller of Yale University developed the Shiller PE 10 to more accurately reflect long term trends and smooth volatile components of the standard P/E ratio. PE 10 is also called the cyclically-adjusted price-to-earnings (CAPE) ratio. The “10” represents the rolling 10 year periods Shiller uses to calculate PE 10.

The PE 10 for the S&P500 is the price of the index divided by 10 year inflation adjusted average earnings. The calculation is: S&P 500 annual earnings...