Shiller CAPE Ratio Flashes Warning Signal for Second Time in 155 Years

The Shiller CAPE ratio has crossed 40 only twice in its 155-year history. The current instance is happening right now, and it's reminiscent of the dot-com bubble burst in 2000 and the Great Depression in 1929.

According to Robert Shiller, creator of the metric, he didn't intend for it to serve as a warning signal for potential stock market crashes. However, the S&P 500 Shiller CAPE ratio has proven highly predictive of looming market declines.

The current level of the S&P 500 Shiller CAPE ratio is near its second-highest ever, with the only other time being in late 1999 and early 2000.

A few stocks are well-positioned to weather what comes next: Johnson & Johnson (JNJ), Procter & Gamble (PG), and Enterprise Products Partners LP (EPD).