Know your index's
true valuation
at a glance.

📊 About Median PE

Why Median is Better Than Average

The median PE is a more reliable valuation metric than the average because it's not affected by extreme outliers. During market bubbles or crashes, average PE can be distorted by extreme values, while the median represents the true "middle" of the historical PE distribution.

📈 About Median PB

When PB Works Better Than PE

The median PB ratio is particularly useful for evaluating asset-heavy sectors like banking, real estate, utilities, and infrastructure. These sectors derive value from tangible assets (buildings, equipment, loan books) rather than future earnings potential.

Why PB matters for these sectors: When a company's assets are its primary value driver, book value provides a more stable and reliable baseline than earnings, which can fluctuate dramatically due to economic cycles, interest rates, or one-time events. A PB ratio below 1.0 suggests the market values the company below its net asset value, potentially signaling undervaluation.

Median advantage: Like median PE, median PB filters out extreme outliers from market bubbles or crisis periods, giving you the true "middle" of historical valuations for a more reliable comparison.

🎯 How to Use

Choosing the Right Comparison Period

Select the appropriate median period based on your investment horizon and market conditions:

💡 Pro Tip: Compare valuations across multiple periods to get a comprehensive view. If an index appears overvalued across all periods, it suggests stronger conviction in the signal. Divergences between short and long-term medians can indicate changing market regimes.

Choosing Between PE and PB

Different metrics work better for different sectors. Select the right metric based on how the index generates value: