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Warren Buffet Market cap vs GDP indicator

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27Rocks
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Warren Buffet Market cap vs GDP indicator  Reply with quote  

There are few charts look as strong as s&p 500 and are providing some of the positive feedback as market is bottomed in 2009 and s&p 500 have gained 215% and some of the investors remains bullish, the market cap to gross domestic GDP ratio displays market is seriously overvalued.As per interview published in Fortune Magazine in 2001 warren buffet states that market cap to GDP indicator is probably the best single measure of where valuations stand at any given moment.
As per Buffet indicator s&p500 will return approx 0.2% a year at this level of valuation which includes dividends yielding around 2% a year.
www.profitconfidential.com/economy/warren-buffett-indicator-market-cap-to-gdp-ratio-overvalued/
Post Wed Jun 17, 2015 2:45 pm
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littleroc02us
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Re: Warren Buffet Market cap vs GDP indicator  Reply with quote  

quote:
Originally posted by 27Rocks
There are few charts look as strong as s&p 500 and are providing some of the positive feedback as market is bottomed in 2009 and s&p 500 have gained 215% and some of the investors remains bullish, the market cap to gross domestic GDP ratio displays market is seriously overvalued.As per interview published in Fortune Magazine in 2001 warren buffet states that market cap to GDP indicator is probably the best single measure of where valuations stand at any given moment.
As per Buffet indicator s&p500 will return approx 0.2% a year at this level of valuation which includes dividends yielding around 2% a year.
www.profitconfidential.com/economy/warren-buffett-indicator-market-cap-to-gdp-ratio-overvalued/


Well, should this happen, then it's going to be a total buying spree for me of stocks on a huge discount. Yee haa!!!! My wife and I made out like bandits on the Great Recession.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Fri Jun 19, 2015 7:07 pm
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27Rocks
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Re: Warren Buffet Market cap vs GDP indicator  Reply with quote  

quote:
Originally posted by littleroc02us
quote:
Originally posted by 27Rocks
There are few charts look as strong as s&p 500 and are providing some of the positive feedback as market is bottomed in 2009 and s&p 500 have gained 215% and some of the investors remains bullish, the market cap to gross domestic GDP ratio displays market is seriously overvalued.As per interview published in Fortune Magazine in 2001 warren buffet states that market cap to GDP indicator is probably the best single measure of where valuations stand at any given moment.
As per Buffet indicator s&p500 will return approx 0.2% a year at this level of valuation which includes dividends yielding around 2% a year.
www.profitconfidential.com/economy/warren-buffett-indicator-market-cap-to-gdp-ratio-overvalued/


Well, should this happen, then it's going to be a total buying spree for me of stocks on a huge discount. Yee haa!!!! My wife and I made out like bandits on the Great Recession.


Well gud luck with that Smile
Post Wed Jun 24, 2015 2:49 pm
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oldguy
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The Ratio is two numbers, Cap/GDP. You can't just look at Cap and say '"oh, it's too high" - maybe the opposite is true, GDP is too low. At the highest point, Jimmy Carter was Prez, up until that time he was the most anti-business Prez in modern history, he drove GDP down with his taxes & regulatory over-reach. As soon as he was voted out, and Reagan was voted in, GDP rebounded and we had the most vigorous business cycle in history, 20 years of solid gains.

We are currently in that same spot - only worse, Prez Obama hates business - his regs and policies do whatever possible to stifle/limit corporate commerce. So for 6 years, Business has not been able to grow/expand (they could easily hire, expand, and build more product - but who would they sell to?). Corporations have been profitable but since that cannot expend they have been stacking the money into the corporate treasuries. And as Obama's term winds down, Business will be poised for growth, expansion, new hiring, yada - hopefully much like 1980.

So I don't worry much about a 124% ratio, a jump in GDP will fix that quickly. Very Happy
Post Wed Jun 24, 2015 3:45 pm
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