Buffett Indicator Flashing Warning Signs of Overvaluation, According to Investor John Hussman
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Warren Buffett's favorite market gauge, the Buffett Indicator, is flashing warning signs according to investor John Hussman.
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The indicator compares total US stock market value to GDP, and is currently above every extreme prior to late 2020.
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Hussman prefers a similar ratio using gross value added instead of GDP, which looks just as elevated.
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The goal is to compare stock market value to the size of the national economy.
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Buffett said the indicator gave a strong warning signal during the dot-com bubble, and saw 200% as playing with fire.