Buffett Metric says it is time to buy

Discussion in 'Wall St. News' started by ZZZzzzzzzz, Feb 4, 2009.

  1. I certainly respect Buffett and his opinions. But on the matter of the relationship between the total market value of US stocks and GDP, its current albeit lower level is still quite high by 1929 standards. Judging strictly by the market value/GDP chart for the period under review as a reason to buy, I wonder what has changed to make it okay now.
  2. Div_Arb


    GDP is clearly dropping for the short to intermediate term, so this indicator basically means nothing. Wait for several more quarters of negative GDP growth, and an extreme situation, like 50% to fire on the market using this indcator. Also, after bubble situations, markets tend to shoot to the downside before reversing. Looks like at 75% its just reached fair value, given current GDP values.
  3. Yeah, well, Buffet is pretty old and has made some of the stupidest moves of his life lately, and will die pretty soon, so I wouldn't be looking to him or his moves for any credible guidance right now...
  4. Div_Arb


    LOL! that was pretty funny...
  5. bro59


    Perhaps the best deal out there is Berkshire itself. Its pretty cheap, and you can get it even cheaper through a proxy like a closed-end fund (ie. US: BIF) that is selling at a discount to NAV.