By the end of 2025, the S&P 500 Shiller PE ratio (CAPE) has risen to 40.74, which is the second highest in the 150-year history of the US stock market. It has significantly surpassed the pre-1929 Great Depression level (about 30x), and is only below the extreme peak of the 2000 dot-com bubble (44.19x);

The current valuation is 139% above the historical average (about 17x), causing the implied real return to be compressed to 2.45%, forming a significant "negative risk premium."

This indicates that the market has broken through three standard deviations (3σ) from the historical mean, entering an extreme abnormal zone with a probability of less than 0.3%. Asset pricing, from a statistical perspective, has completely detached from fundamental forces.