Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator

Discussion in 'Economics' started by SunTrader, Dec 1, 2019.

  1. "The denominator in the charts below now includes the Advance Estimate of Q3 GDP and the October close data. The latest numerator value, when the latest data is not yet available, is extrapolated based on the quarterly change in the Wilshire 5000. The current reading is 144.7%, up from 142.1% the previous quarter." (Not too far below Y2K tech wreck all time high valuation in 2000):

    https://www.advisorperspectives.com...dated-look-at-the-buffett-valuation-indicator
     
  2. dozu888

    dozu888

    except in 2000 the 10 year yield was what 6%? money was about 3X more expensive back then.

    no longer in Kansas with the ZIRP/NIRP... why can people not understand this.
     
    GregorySG9 likes this.
  3. Specterx

    Specterx

    Market cap to GDP is good for clickbait headlines but little else. The metrics that matter and are useful would be things like the ERP (together with a forecast of the future path of rates), or overall USD portfolio allocation to equities vs cash and bonds (together with a forecast of money supply growth + bond issuance).
     
  4. While it is only one data point (topping out when Naz and the rest of U.S. equities topped out) it is one mighty strong data - at least in my eyes.

    To each their own.