The “Buffett Indicator” Shows A Record Disconnect Between Markets And The Real Economy

The “Buffett Indicator” Shows A Record Disconnect Between Markets And The Real Economy
Stéphane Renevier, CFA

about 3 years ago1 min

Mentioned in story

  • What’s been dubbed by Warren Buffett as “probably the best single measure of where valuations stand at any given moment" is currently showing that US stocks are very overvalued.
  • The “Buffett indicator” shows the ratio of US companies’ market valuations to the size of the country’s economy – and currently, that ratio is at a record high.
  • Why should I care? Two things could happen to close the gap: stock prices fall or the US economy grows.


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