Buffett Indicator hits 237%, surpassing warning levels
BRK-B Berkshire Hathaway Inc
$575.25 +0.76%
View chart & analysis → - 1The ratio of total US stock market capitalization to GDP, using the Wilshire 5000 Index as a proxy, recorded 237%.
- 2Warren Buffett warned that investors are playing with fire as the ratio of total US stock market capitalization to GNP exceeds 200%, a level considered a warning when market value indicators approach it.
- 3Berkshire Hathaway is maintaining nearly $385 billion in cash reserves.
So what's the key point?
The value of the US stock market is 237% higher than the size of the economy. Buffett views this as a warning, and Berkshire Hathaway is holding a large amount of cash.
Source The Motley Fool +1 · View original ↗
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