Back in 2001, the most iconic investor of all time, Warren Buffett, said that market cap to GDP ratio is “probably the best single measure of where valuations stand at any given moment.” Since then, Wall Street has referred to the metric as the “Buffett Indicator.”

Simple Idea

The Buffett Indicator is an extremely simple concept: it is a measure of the size of the stock market compared to the size of the actual U.S. economy. To Buffett, this number is a clear indication of how expensive share prices are in real time.

The Numbers

The latest Buffett Indicator ratio comes…

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