... The Buffett Indicator compares the total value of the U.S. stock market to the country’s GDP. Named after Warren Buffett, a legendary investor, and CEO of Berkshire Hathaway (NYSE: BRK.A), who described it as “the best single measure of where valuations stand at any given moment,” this ratio provides insight into whether the stock market is overvalued or undervalued relative to the overall economy. On July 9, the Warren Buffett Indicator reached 196.19%, marking the highest level in history. This surpasses the peaks observed during the Dot-Com bubble, the Global Financial Crisis, and the 2022 bear market. ... https://finbold.com/warren-buffetts-stock-market-indicator-just-hit-an-all-time-high/ That said, does not mean a dot-com like sell-off is in near future. “It's tough to make predictions, especially about the future.” ― Yogi Berra
I'm seeing these Warren buffet indicators being posted all over, it's a first time I have seen a wave of these being mentioned ... It's actually now at 198 which is extremely overbought! A few more points and it will be the highest it's ever been in history. Around 2021 it topped off just above 200
I'm not an XYZ fan, but 2 days ago .... It sounds like the wording from some porno forum. OK. Better don't be too imaginative.
Good Morning volpri, lol, that is VERY funny. LOL HAHAHAHAHAHA I will not try to fight the 100% bull market.
I didnt realise there were people in our community that didnt like Buffet. Isnt that like being a basketball fan but not liking Michael Jordan?
Good Morning semperfrosty, I can not speak for others, but Buffet told me to dollar cost average the SP500 index back in 2010 so I can be rich one day in the future, I did what he told me to do, and he was right. Best advice I did. I am very bless for Warren Buffet and John C. (Jack) Bogle. These two will make me rich one day. ES futures for rich quickly.
Email I received monday. 2024 is showing increasing parallels to 2000, right before the Tech Bubble busted. Bubbles almost always grow larger than most could anticipate, and there is always a story to seemingly justify them, as there is with AI today. When they pop, they pop violently as was seen when the Tech Bubble collapsed, leading to an 80% peak to trough loss on the Nasdaq. Imagine a 50% decline in your portfolio, let alone 80%. I believe the current bubble is quite large and dangerous, which is why we are far more conservatively positioned, taking advantage of the extremely attractive valuations in areas such as bonds, REITs, and value stocks. A very low risk 8%, is much more attractive than a potential 20% return with 50%-60% downside, especially when we are talking about retirement funds. When valuations are more attractive, absolutely it makes sense to get more aggressive. Here are a few data points that are eerily similar to previous stock bubbles, particularly, the Tech Bubble of the late 1990s. For instance, relative to the S&P 500, the S&P 500 Momentum Index has surged to a new cycle high and is at its highest since August of 2000. The ratio of US Large Caps to US Small Caps is at its highest level since October 1999. The ratio of Growth Stocks to Value Stocks in the US is at its highest level since March 2000, the peak of the dot-com bubble. Small cap stocks are being outperformed by large caps by the most since 1998. Millennials and Gen Z are 90% invested in stocks in their 401ks, based on Vanguard's defined contribution plans. The S&P 500 made a new all-time closing high on Friday with just 43% of components above their 50-day moving average. In the past 25 years, the only other time we've seen an all-time high with less than 45% above their DMA's was December 1999. The S&P Expanded Tech Forward P/E is almost as high as it was in 2021, when interest rates were near 0%. This makes absolutely no sense whatsoever as higher interest rates, reduce valuations for long duration assets such as Tech stocks, because the opportunity cost becomes dramatically higher. Keep in mind that the Nasdaq dropped by 30% in 2022, when valuations were similar. Here is a poignant quote from John Hussman: "Even glamour companies of the tech bubble that prospered from a growth perspective lost value from an investment perspective. from their 1999-2000 speculative highs to their 2007 bull market peaks (entirely excluding the global financial crisis that followed), Amazon enjoyed compound annual growth approaching 40%, Microsoft enjoyed revenue growth averaging 14% annually, and Cisco Systems enjoyed revenue growth averaging 22% annually. During that same period, all of these stocks posted negative cumulative returns, with Amazon losing 5.5%, Microsoft losing 20.3% and Cisco losing 57.4%. Be careful about extrapolation once extrapolation has already produced extraordinary valuations." It is really easy to see how a lost decade can once again occur for stocks, given the current valuations and the market concentration that we are seeing. It really would only take Nvidia, Apple, Amazon, Tesla, Meta, Microsoft, Costco, and Alphabet mean reverting towards more normalized valuations. I mean Costco trades at 53 times earnings and Apple is at one of its highest valuations ever, despite fairly mundane growth prospects. Mean reversion occurring doesn't seem too unlikely in our estimation, which is why we find other opportunities more attractive. Real estate seemed like a no-brainer investment in 2004-2007, only to lead to the biggest real estate crash since the Great Depression. The Nifty Fifty was the same in the 1970's. Bubbles are built on speculative behavior getting rewarded, as we have seen from valuations continuing to grow to increasingly higher levels, further away from historical averages. These are times when patience and discipline are more important than ever. In investing you have to run your own race. When a distance runner, tries to keep up with a sprinter, they are bound to tire themselves out, as that is not their game. Similarly, those that are trying to compress 40 years of investment returns, into 5 years through speculating in the bubble and using leverage through options, are unlikely to hold on to their gains when the bubble bursts.
Good Morning semperfrosty, You are correct about that. Most importantly, he did it Easily without working hard and stress out and low capital and he enjoy the life. And Warren Buffet and John C. (Jack) Bogle help the average USA person get rich. Even me as a once poor person, I now have alot of money from nothing as a youth. These 2 help people. Jim Simmons is second best to do it, but he had to work very very hard. I do not like Jim Simmons because he not show anyone else how to get rich. I personally do not like to read anything about Jim Simmons or Renaissance Technologies are anything about traders who think like him, because what he did is not repeated able and makes no-one rich. So waste of time to read these people.