Buffett Indicator

Extracted Attributes

• Creator

  Warren Buffett

• Formula

  Total Market Capitalization / Gross Domestic Product (GDP)

• Alternative Names

  Buffett metric, Market capitalization-to-GDP ratio, Buffett Index, Buffett Ratio

• Primary Index Used

  Wilshire 5000 Index

Timeline

• Warren Buffett introduces and endorses the indicator in a landmark Fortune Magazine article, calling it 'probably the best single measure of where valuations stand at any given moment.' (Source: Web Search)

  2001-12-10

• The Buffett Indicator crosses the 200% level for the first time during the 'everything bubble', a level Buffett previously warned was 'playing with fire'. (Source: Wikipedia)

  2021-02-01

• The indicator reaches 219% (based on a $69.15T market capitalization and $31.57T GDP), indicating the market is strongly overvalued. (Source: Web Search)

  2026-03-31

• The US Buffett Indicator is recorded at 233.92%. (Source: Web Search)

  2026-05-22

• GuruFocus reports the Buffett Indicator at 238.8%, indicating the stock market is significantly overvalued. (Source: Web Search)

  2026-06-02

Buffett indicator

The Buffett indicator (or the Buffett metric, or the Market capitalization-to-GDP ratio) is a valuation multiple used to assess how expensive or cheap the aggregate stock market is at a given point in time. It was proposed as a metric by investor Warren Buffett in 2001, who called it "probably the best single measure of where valuations stand at any given moment", and its modern form compares the capitalization of the US Wilshire 5000 index to US GDP. It is widely followed by the financial media as a valuation measure for the US market in both its absolute, and de-trended forms. The indicator set an all-time high during the so-called "everything bubble", crossing the 200% level in February 2021; a level that Buffett warned if crossed, was "playing with fire".

Web Search Results

• The Buffett Indicator: Market Cap to GDP - Updated Chart | LongtermTrends

  ### Interpretation The Buffett Indicator, also known as Market Cap to GDP, has gained prominence as a long-term valuation indicator for stocks, largely due to Warren Buffett's endorsement. In a Fortune Magazine interview back in 2001, Buffett referred to it as "probably the best single measure of where valuations stand at any given moment." This statement has drawn attention to the indicator's potential significance in assessing market conditions. The calculation of the Buffett Indicator involves dividing the total market value of all publicly-traded stocks within a country by the country's Gross Domestic Product (GDP). By comparing the stock market's size to the overall economic output, this ratio provides insights into the relative valuation of the market. [...] to Gold Cryptocurrencies Bitcoin vs. Nasdaq Bitcoin vs. M2 Ethereum vs. Bitcoin Foreign Exchange Developed Markets Emerging Markets Frontier Markets [...] ### Interpretation The S&P 500 to GDP ratio, like the Buffett Indicator, assesses the stock market's valuation relative to the economy. However, it specifically considers the market capitalization of the 500 companies in the index, while the Buffett Indicator covers all publicly traded stocks. The S&P 500 ratio offers a narrower view, focusing on large-cap companies, while the Buffett Indicator provides a broader perspective of the entire market, including smaller-cap stocks and companies outside the S&P 500.

• Buffett Indicator Valuation Model

  50 years and has been a key driver in the growth of the Buffett Indicator over time, since US stocks have risen in value due to overseas activities not included in US GDP. [...] This is a very fair criticism of the Buffett Indicator itself -- though not necessarily for the valuation model presented here, which looks at the Buffett Indicator relative to it's own exponentially growing trend line. Our model expects exponential growth of the indicator over time, such that we have a "fair" Buffett Indicator value of 50% in 1960, growing to ~120% in 2020. Part of that natural increase is due to technological advances that lead to higher profits for existing firms, or from the creation of new industries entirely. Another part of that natural increase is because US market value is growing faster than GDP due to the rise of international sales of US-based firms. The key point here is that the model is looking at relative performance against the indicator's own trend rate, [...] Current Market Valuation Logo # The Buffett Indicator ## Overview The Buffett Indicator (aka, Buffett Index, or Buffett Ratio) is the ratio of the total United States stock market to GDP. As of March 31, 2026 the ratio values are: #### Buffett Indicator = $69.15T / $31.57T = 219% This ratio fluctuates over time since the value of the stock market can be very volatile, but GDP tends to grow much more predictably. The current ratio of 219% is approximately 64.84% (or about 2.1 standard deviations) above the historical trend line, suggesting that the stock market is Strongly Overvalued relative to GDP. #### Why Does it Matter?

• Buffett Indicator: Where Are We with Market Valuations? - GuruFocus

  rates also promotes investment, as it makes a dollar of future profit much more valuable. Both results may lead to an inflow into the stock market, thus increasing the total market cap. [...] Similarly, based on GuruFocus newly developed indicator, the expected returns are calculated and shown in the last chart. In this case, the last part, change of valuation is replaced by calculating the beginning and ending ratio of TMC/(GDP + Total Assets of Fed), while other parts stay the same. Under the condition that the length of a full economic cycle is 8 years, three different expected returns are estimated based on different assumptions on the market trends: undervalued, overvalued and fair-valued. As of 06/03/2026, the recent 20-year average modified ratio is 105.42%. [...] GURUFOCUS.COM » Buffett Indicator Tutorial # Buffett Indicator: Where Are We with Market Valuations? As of 2026-06-02 12:00:00 AM CDT (updates daily): The Stock Market is Significantly Overvalued according to Buffett Indicator. Based on the historical ratio of total market cap over GDP (currently at 238.8%), it is likely to return -1.3% a year from this level of valuation, including dividends. Meanwhile, based on the historical ratio of newly introduced total market cap over GDP plus Total Asset of Federal Reserve Banks (currently at 197.3%), the stock market is Significantly Overvalued, and it is likely to return -1.4% a year from this level of valuation, including dividends.

• US - Buffett Indicator | Series - MacroMicro

  233.92 % 1.04 Share Chart DIY The US - Market Cap (% of GDP) data, commonly referred to as the Buffet Indicator, represents the ratio of the total market value of all publicly listed companies in the US stock market to the country's Gross Domestic Product (GDP). This ratio indicates the stock market’s relative size and its potential impact on the overall economy. A higher ratio suggests that the stock market is larger relative to the economy, potentially exerting a greater influence. Conversely, a lower ratio indicates a smaller stock market with less economic impact. This metric is also used for stock market valuation and assessing market health. An extremely high ratio may suggest that stock market momentum is not necessarily driven by the underlying real economy. [...] #### Latest Stats US - Buffett Indicator 2026-05-22 233.92 % 232.88 % #### Specs ###### Category Stock Market ###### Region United States ###### Frequency Day ###### Units Percent #### Source MacroMicro #### Related Charts #### US - Buffett Indicator #### US - Total Market Cap (% of GDP) #### World - Stock Market Capitalization by Country (% of GDP) Data Download Data File Format: CSV I agree to the data usage terms and conditions of MacroMicro Data Download Data File Format: CSV I agree to the data usage terms and conditions of MacroMicro #### Download Chart (png) Upgrade to the Business Plan to export charts with the latest values and without watermarks. Contact our specialists to learn more. #### Notification Center [...] # US - Buffett Indicator 233.92 % 1.04 Share Chart DIY

• Warren Buffett’s favorite market indicator is flashing a warning

  In a new Fortune article, my colleague Shawn Tully discusses the metric—the Buffett Indicator. It is the ratio of total U.S. stock market capitalization to GDP. It has become one of the most closely watched valuation gauges on Wall Street since Buffett explained its logic in a landmark 2001 Fortune article, according to Tully. Buffett was writing at a time when the dot-com bubble was deflating. The premise is straightforward: when the ratio climbs too high, stocks are expensive relative to the underlying economy; when it falls, opportunity often follows. [...] Buffett laid out the stakes plainly in that original piece: “If the relationship [between the total value of equities and GDP] drops to 70% or 80%, buying stocks is likely to work out very well for you,” he wrote. “If it approaches 200% as it did in 1999 and 2000, you are playing with fire.” By the time the article was published, the S&P 500 had already dropped more than 20%. It would eventually retreat nearly 50% from its peak before the indicator fell back below 80%, setting up one of the great buying opportunities of the era. “The concepts Buffett presented a quarter-century ago are timeless, and they’re especially relevant today because the yardstick he tagged as pointing to danger then looks even more ominous now,” Tully writes.