Warren Buffett’s Global Market Indicator Signals Stocks Are Too Pricey And Might Crash

  • Warren Buffett’s favored market indicator surges to a record high of 142%, signaling stocks are heavily overpriced and may plummet in the months ahead.
  • “BOOM! Global stocks have gained another $1.6 trillion in market capitalization this week,” Welt market analyst Holger Zschaepitz tweeted on Sunday. “Equities now worth $120.3 trillion, highest in history.”
  • The US stock market is firmly in “fire” territory with a current Buffett indicator reading of 208%.

Theron Mohamed from Markets Insider writes:

“Warren Buffett’s favorite market indicator has surged to a record high of 142%, signaling US and international stocks are heavily overpriced and could plummet in the months ahead.

The global version of the “Buffett indicator” takes the combined market capitalization of the world’s publicly traded stocks, and divides it by global GDP. A reading north of 100% indicates the global stock market is overvalued relative to the world economy.

“BOOM! Global stocks have gained another $1.6 trillion in market capitalization this week,” Welt market analyst Holger Zschaepitz tweeted on Sunday. “Equities now worth $120.3 trillion, highest in history.”

“Global stock market cap now equal to 142% of world GDP, an all-time high as well,” he added.

Buffett trumpeted his namesake gauge in a Fortune magazine article in 2001. The billionaire boss of Berkshire Hathaway described it as “probably the best single measure of where valuations stand at any given moment…”

See full story here.



Categories: Business, International

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