The “Buffett Indicator” measures the ratio of the total value of the US stock market via the Wilshire 5000 Index divided by the dollar value of US gross domestic product. It stands at its lowest level since early September.
For its part, the indicator is still above levels it plumbed during past market bottoms, including the Covid-19 sell-off of early 2020, when it fell to nearly 100 per cent.
Other commonly used valuation gauges tell a similar story: The S&P 500, for example, now sits at 20.6 times forward earnings, down about 8 per cent from earlier this year, though still above the 10-year average of 18.6 times.
Source: Bloomberg
https://www.businesstimes.com.sg/compan ... buy-signal
