Buffett Indicator Hits Record 232% as Stock Market Flashes Dot-Com Era Warning
Macro
The Buffett indicator, which Warren Buffett used to warn of the dot-com bubble, has reached a record high of just over 232%, surpassing the 200% level he once called 'playing with fire.' The metric compares the total value of U.S. stocks to GDP, and Buffett previously said that when it approaches 200%, stocks are overvalued. The S&P 500 Shiller CAPE Ratio is also at its second-highest point in history at just over 41, close to its 1999 peak of 44. In a recent CNBC interview, Buffett cautioned that many investors are treating the market like gambling and that prices for many things will look very silly, though he did not advise avoiding investing entirely.
