This indicator hasn’t flashed this red since the dot-com bubble

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 6 November 2025

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

The “Shiller PE Ratio” is at its highest level since November of 1999. That was at the peak of the online gold rush right before the dot com bubble burst in 2000. Today on the show, we learn what the Shiller PE Ratio is, how it works and whether we should be worried that it’s relatively high right now.

You can find John Campbell's book here: Fixed: Why Personal Finance is Broken and How to Make It Work for Everyone

Related episodes:
What’s a Bubble?
Zombie 2nd mortgages are coming to life, threatening thousands of Americans' homes

For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org. Fact-checking by Tyler Jones. Music by Drop Electric. Find us: TikTok, Instagram, Facebook, Newsletter.

Learn more about sponsor message choices: podcastchoices.com/adchoices

NPR Privacy Policy

Transcript

Click on a timestamp to play from that location

0:00.0	NPR.
0:02.0	This is the indicator from Planet Money. I'm Darym Woods.
0:15.0	And I'm Patty Hirsch.
0:16.0	At this point, we can pretty much stipulate that the internet can be a very scary place.
0:21.1	And right now, it's particularly scary if you pay close attention to a certain stock
0:25.4	market indicator that a lot of internet people are whigging out about.
0:30.0	It's called the Schiller-Pe ratio.
0:32.8	And it's at its highest level since November of 1999.
0:41.3	So, 1999 was a turbulent time.
0:44.0	This was the peak of an online gold rush.
0:48.5	Investors making big bets on how the internet was going to change everything. Heady times, geocities, excitepets.com.
0:53.5	It all ended up being a huge dot-com bubble that burst spectacularly in
0:58.9	2000. And it was actually really scary. You know, the market cratered. Lots of companies went out of
1:04.7	business, including the one that I was working at at the time. Pretty soon after the bubble burst,
1:09.7	I was out of work. Yeah, so the scars are real.
1:13.7	And because it's a bit scary and because it's an indicator and because this is the indicator,
1:19.2	today we're going to look at the Schiller-Pe ratio. We'll explain what it is and how it works
1:24.7	and tell you whether or not you need to be scared too. That's coming up
1:28.8	after the break. All right. So the Schiller-P.E. ratio. It was developed by Robert Schiller,
1:37.9	who is an economist. This is Liz Ann Saunders. She's the chief investment strategist at Charles
1:42.7	Schwab. And she quite often consults
1:45.2	the ratio, which is sometimes called the cape.
	...

Transcript will be available on the free plan in 11 days. Upgrade to see the full transcript now.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from NPR, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of NPR and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.