In contrast, I've often quoted the Shiller P / E (which essentially uses a 10 - year average of inflation - adjusted earnings) as a simple but historically informative alternative, but I should emphasize that we strongly prefer our standard methodologies based on earnings, forward earnings, dividends and other fundamentals, all which have a
fairly tight relationship with subsequent 7 - 10 year total returns (see Lessons from a Lost Decade, The Likely
Range of Market Returns in the Coming Decade, Valuing the S&P 500 Using Forward Operating Earnings, and No Margin of Safety, No Room for Error).
It is a simple discrepancy which must be laid to rest, or there is no way to conclude anything about the system: how were CO2 levels maintained in a
tight range over centuries, given all the random influx and egress from volcanic activity, environmental perturbations, deforestation, desertification, fossilization, agricultural trends, wars, oceanic turnover, continental drift, weathering of minerals, fires, floods, etc..., if there is not a
fairly strong feedback holding them in place?