The Globe and Mail reports in its Friday edition that by any number of valuation metrics, U.S. stocks look expensive while Canadian shares look like a bargain. The Globe's Matt Lundy writes that U.S. equities have rarely been as pricey as they are today, based on the cyclically adjusted price-to-earnings (CAPE) ratio, which takes a longer view of stock performance over the economic cycle. The U.S. ratio divides share prices for S&P 500 companies by their average earnings over the past 10 years, adjusted for inflation. Investors often use the CAPE ratio to assess the potential long-term returns for a group of stocks. In this instance, the elevated CAPE ratio of 36.6 suggests there is limited upside for U.S. shares in the coming years. Meanwhile, the CAPE ratio for Canadian stocks was 24 in September -- about equal to the previous 20-year average. During the 1980s and 1990s, valuations for Canadian and U.S. stocks tracked each other quite closely, based on the CAPE ratio. More recently, however, a large gap has opened up, with American equities trading at pricier valuations. U.S. stocks have benefited this year from hype around artificial intelligence, strong economic growth and the lowering of interest rates.