Buffett indicator

June 30, 2025 - The study examined 10-year periods ... The Buffett Indicator forecasted an average of 83% of returns across all nations and periods, though the predictive value ranged from a low of 42% to as high as 93% depending on the specific nation. Accuracy was lower in nations with smaller ...

These standard deviation bands correspond with CMV ratings to estimate overall stock market over/undervaluation. As illustrated, the current Buffett Indicator value of 230% is 2.4 standard deviations above the trend line, indicating the market ...

In our latest white paper, Which ... examined the “Buffett Indicator”, inverted yield spreads, and five other leading indicators commonly used to predict market and economic cycles. Over 21 major market declines since 1950, each indicator’s accuracy and consistency were ...

As pointed by Warren Buffett, the percentage of total market cap (TMC) relative to the US GNP is “probably the best single measure of where valuations stand at any given moment.” · GuruFocus modified this measurement by adding the total asset of Federal Reserve Banks in the denominator, arriving at another indicator for market valuation.

The calculation of the Buffett Indicator involves dividing the total market value of all publicly-traded stocks within a country by the country's Gross Domestic Product (GDP). By comparing the stock market's size to the overall economic output, this ratio provides insights into the relative valuation of the market.

When the indicator is well above 100%, it may signal a bubble, as it suggests that stock prices are rising faster than the overall economy. When the indicator is below 100%, it may suggest that stocks are relatively cheap in comparison to the GDP. While the Buffett Indicator provides valuable insight, it isn’t a perfect measure.

The Wilshire index is a more intuitive broad metric of the market than the Fed's rather esoteric "nonfinancial corporate business; corporate equities; liability, level". I've noticed some folks use lagging GDP figures to estimate the current Buffett indicator figures - in other words, people have used the current numerator and the lagging GDP figure in the calculation, which is not accurate.

September 3, 2025 - In our latest white paper, Which ... examined the “Buffett Indicator”, inverted yield spreads, and five other leading indicators commonly used to predict market and economic cycles. Over 21 major market declines since 1950, each indicator’s accuracy and consistency were ...

September 13, 2025 - Economic Indicator: The ratio also provides a broad measure of economic health. Significant deviations between market capitalization and GDP can reflect shifts in investor sentiment or economic conditions, offering a macroeconomic perspective. Historical Comparison: By comparing the current Buffett Indicator ratio with historical data, investors can identify long-term market trends and assess whether current valuations are in line with historical norms.

The study found that the Buffett ... value of 83% across all nations and periods. However, the accuracy of the indicator varied depending on the specific nation, ranging from a low of 42% to as high as 93%. The study also noted that the accuracy was lower in nations with ...

Buffett Indicator was 2.209 as of 2025-12-30, according to GuruFocus. Historically, Buffett Indicator reached a record high of 2.222 and a record low of 0.312, the median value is 0.892. Typical value range is from 1.28 to 1.88.

April 17, 2025 - "It is better to be roughly right than precisely wrong," writes Carveth Read in "Logic: Deductive and Inductive." That's the premise of the Buffett Indicator.

2 weeks ago - In a Forbes interview in December 2001, Warren Buffett said that the ratio is a useful tool for gauging the overall valuation of the stock market, where a range of 75-90% is reasonable; over 120% suggests the stock ...

The Wilshire index is a more intuitive broad metric of the market than the Fed's rather esoteric "nonfinancial corporate business; corporate equities; liability, level". I've noticed some folks use lagging GDP figures to estimate the current Buffett indicator figures - in other words, people have used the current numerator and the lagging GDP figure in the calculation, which is not accurate.

These models are contrarian indicators. When market sentiment is bearish/panicked we display them in green. When sentiment is bullish/euphoric, we show them as red. These classifications very bluntly reflect Buffett's timeless maxim "be fearful when others are greedy ...

May 24, 2024 - Well, research by YCharts, an investment research firm, sort of tried to look for an answer to this question. So it drew up data for the US stock markets and crunched the numbers to see how accurately the Buffett Indicator predicted stock market crashes since 1971.

September 8, 2025 - A ratio below 75% suggests a market is undervalued, while a ratio above 115% indicates overvaluation. The calculation divides the total market value of publicly traded stocks by the GDP, often using the Wilshire 5000 for the U.S. market.

July 9, 2025 - He noted in 2001, "If the ratio approaches 200% -- as it did in 1999 and a part of 2000 -- you are playing with fire." Today, the indicator isn't just approaching 200%; it has risen above that dangerous threshold. Buffett's concern about a high market valuation as measured by the Buffett indicator has been justified by history.