The article says Buffett’s indicator, the ratio of total U.S. stock market value to GDP, hovers around 233% according to GuruFocus, above the 200% level Buffett calls “playing with fire.” Before the dot-com bubble burst, the indicator peaked near 143%, and from March 2000 to October 2002 the S&P 500 fell about 49% while the Nasdaq Composite plunged nearly 78%; the S&P 500 did not regain its prior high until June 2007. In late 2021 the indicator sat near 200%, and as inflation surged and the Federal Reserve raised rates, the S&P 500 fell as much as 25% between January and October 2022. The author argues the indicator is not proof a crash is coming, since today’s market differs from the dot-com era and globalization can inflate the ratio, but overvalued stocks remain vulnerable if AI spending slows, rates keep rising or earnings disappoint.
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Relevance: medium
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/23/2026 | 759.97 |
| Change that session | -0.52% |
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