⚠️ The Buffett Indicator is flashing extreme valuations again
🇺🇸 The Wilshire 5000-to-GDP ratio — often called the “Buffett Indicator” — is reportedly near historic highs.
💣 Why investors watch it:
It compares: 📈 Total stock market value
vs
🏭 The size of the real economy (GDP)
👇 Historically, extremely high readings have often appeared near major market tops:
• Dot-com bubble
• 2007 financial crisis
• Prior speculative peaks
But there’s also an important counterargument:
Today’s market structure is very different from past decades because of: • AI-driven earnings growth
• Globalized corporate profits
• Massive liquidity creation
• Dominance of mega-cap tech firms
⚠️ High valuations alone do not predict exact timing for a crash — markets can remain expensive for long periods during strong momentum cycles.