Buffett Indicator as of March 25, 2021

The Buffett Indicator is the ratio of total US stock market valuation to GDP. Named after Warren Buffett, who called the ratio “the best single measure of where valuations stand at any given moment”. To calculate the ratio, you need to get data for both metrics: 1) Total Market Value and 2) Gross Domestic Product. As of March 25, 2021, the Buffett Indicator is:

Buffett Indicator: $48.6T ÷ $21.7T = 223%

By our calculation that is currently 79% (or about 2.58 standard deviations) above the historical average, suggesting that the market is Extremely Overvalued.

Market Value to GDP

These are historical, all-time highs. However, with interest rates at historic lows, there is reason to suspect that “this time is different” may hold true for the time being. Below is the historical chart of the Buffett Indicator since 1990:

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