Buffett Indicator

Buffett Indicator Valuation Model

The Buffett Indicator (aka, Buffett Index, or Buffett Ratio) is the ratio of the total United States stock market to GDP.

$$\frac{\text{Stock Market }\sum \text{MCAP}}{\text{GDP}}$$

• 1: Stock is overvalued → Bubble

• <1: Stock is undervalued → Buy Now