The Shiller PE ratio has been historically associated with predicting overvalued markets that may lead to future corrections or crashes. The Shiller PE - shown in the graph above - reached extremely high levels (above 44 in the year 2000), well above its long-term average of around 16-17. This suggested that the market was highly overvalued. 

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The high ratio was a signal of the impending dot-com bubble burst, which resulted in a major stock market crash from 2000 to 2002. Before the 2008 financial crisis, the Shiller PE ratio rose to levels above 27, indicating significant overvaluation compared to historical norms. 

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This preceded the severe market decline of 2008-2009, when the S&P 500 lost about 50% of its value. In recent years, particularly leading up to 2020, the Shiller PE ratio again reached elevated levels above 30. While not immediately predictive of the COVID-19 crash, it did signal that markets were trading at relatively high valuations, making them more susceptible to sharp downturns when unexpected shocks (like the pandemic) occurred.

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The Shiller PE ratio is not a precise timing tool. High valuations can persist for extended periods before a correction happens, so it is more of a warning signal than an immediate predictor. Structural changes in the economy (such as the dominance of tech stocks) can affect its accuracy. Still, looking at a 10-year historical view, it's clear the market's valuation is above or approaching previous highs that preceded market corrections.  Is this why Warren Buffet just went to 30% cash? Probably. And it's advisable to do the same while the market is still in a bull run.