One Of Warren Buffett’s Favorite Metrics Says Stocks Are Way Too Expensive.


I was searching on metrics that Warren Buffett likes to track and I found this article on Forbes about U.S. Total Market Capitalization and how he uses it to determine if the market is to hot or just right.

The Buffett Indicator takes the stock market’s market capitalization and divides it by the US Gross Domestic Product. From an interview he did with Fortune in December 2001 Buffett said “For me, the message of that chart is this: If the percentage relationship falls to the 70% or 80% area, buying stocks is likely to work very well for you. If the ratio approaches 200%–as it did in 1999 and a part of 2000–you are playing with fire.”

Well, if you download Atlas Insights, now you can have Warren’s favorite market indicator right on any of your mobile devices (Apple or Android) or desktops (Windows or MAC) and you’ll be just as informed as Warren.


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