Where Data Tells the Story
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Once hailed by its namesake investor as “probably the best single measure of where valuations stand,” the Buffett Indicator just hit an alarm-ringing 225% — its highest level on record, adding to the growing chorus of market commentators who think we might be in for a correction.
Alongside the Buffett Indicator, other metrics are flashing amber or red, too. Investors are paying record prices for every dollar of future S&P 500 revenue, and the market is increasingly concentrated in a handful of megacaps, with eight tech stocks now responsible for ~40% of the S&P 500 Index’s value.
Back in 2001, Buffett warned that the metric nearing 200% would mean “playing with fire.”
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