American companies do a lot of business outside of the US. That’s why the buffet indicator can be higher these days compared to the good old days.
redditmodsRrussians on
You had your taste yesterday, rainbow bears. Go back into your caves and dream about elliot waves fibernaughtying your sahm rules in a 69 while sleeping under the light of mercury being hit by the gatorade.
Tasty-Window on
what in the boomer does this mean? 
hahyeahsure on
hey guys look I’m totally not a bot that flooded during the 2020 purge: bullish, everything is fine, brrr, calls, this time is different, indicators are wrong, something something ber
Silvatungdevil on
Don’t worry guys, Buffett has no clue what the hell he is talking about! It will be fine.
Fit-Ad8824 on
You think that’s because a ton of money has been printed and hardly any of it has been sucked back out?
randomDude929292 on
calls it is
chazz8917 on
You would have missed out on so many gains if you followed this advice in 2019.
spac420 on
we global now Paw Paw
Codeandstocks on
Different times lmao
callmecrude on
Buffett himself has come out numerous times admitting the flaw in his original indicator. It assumes companies only do business in their home country. In ‘80s this was mostly true. Today, the top 100 US companies do nearly half their business outside America.
For the Buffett indicator to work as intended you have to normalize the value of the stock market to account for the ever-growing % of business that’s taking place internationally. When you do that, you find we’re well within historical ranges.
There’s also the 2 other common criticisms that:
1) the indicator doesn’t take interest rates into account, so obviously it will look skewed when we’re sitting in periods of historically low rates compared to the 6-10%+ rates we saw throughout the ‘70s – 2000’s.
2) the indicator looks solely at top line revenue, which of course will skew it upwards as high margin tech companies dominate the market that was once run by low margin auto and oil companies. People will (rightfully) pay a premium to own Microsoft over GM because the balance sheet, margins, and cash flows are all much healthier.
Chutney__butt on
Buffet is out AI is in, haven’t you heard?
EntrepreneurFunny469 on
This is such a bad metric you can only find it on WSB
AdBusiness5212 on
He sees nothing, move over grandpa, its time for AI AND NUCULAR
Clever_droidd on
To be fair… 2021 may be an indication of what happens at this level.
Moist_Employment_677 on
This means it’s time to buy calls
Chogo82 on
It means the government is going into debt to pump liquidity into the market.
A financial indicator before the internet was a thing, might as well use the cavemen fire etf
Deathchariot on
Calls, stonks only go up
tapk68 on
Back in my days buffets were simply a place to eat, now they are economists.
Izoliner on
I hear that we are sliding into financial doom every day since Covid started.
ImpossibleDrawer6338 on
Take this boomer logic somewhere else
Edawg661 on
SPY ATH as usual
CosmicRebell on
Buffet that guy that sold apple at the bottom?
macandcheesehole on
Buffet got lucky.
RoronoaZorro on
According to this graph, the indicator has been above peak dotcom levels permanently for basically 4 years at this point and equalled those levels like another couple of years before that.
So as much as I would like to see a correction, this just isn’t a good indicator even at the surface level.
28 Comments
It’s a dumb indicator.
American companies do a lot of business outside of the US. That’s why the buffet indicator can be higher these days compared to the good old days.
You had your taste yesterday, rainbow bears. Go back into your caves and dream about elliot waves fibernaughtying your sahm rules in a 69 while sleeping under the light of mercury being hit by the gatorade.
what in the boomer does this mean? 
hey guys look I’m totally not a bot that flooded during the 2020 purge: bullish, everything is fine, brrr, calls, this time is different, indicators are wrong, something something ber
Don’t worry guys, Buffett has no clue what the hell he is talking about! It will be fine.
You think that’s because a ton of money has been printed and hardly any of it has been sucked back out?
calls it is
You would have missed out on so many gains if you followed this advice in 2019.
we global now Paw Paw
Different times lmao
Buffett himself has come out numerous times admitting the flaw in his original indicator. It assumes companies only do business in their home country. In ‘80s this was mostly true. Today, the top 100 US companies do nearly half their business outside America.
For the Buffett indicator to work as intended you have to normalize the value of the stock market to account for the ever-growing % of business that’s taking place internationally. When you do that, you find we’re well within historical ranges.
There’s also the 2 other common criticisms that:
1) the indicator doesn’t take interest rates into account, so obviously it will look skewed when we’re sitting in periods of historically low rates compared to the 6-10%+ rates we saw throughout the ‘70s – 2000’s.
2) the indicator looks solely at top line revenue, which of course will skew it upwards as high margin tech companies dominate the market that was once run by low margin auto and oil companies. People will (rightfully) pay a premium to own Microsoft over GM because the balance sheet, margins, and cash flows are all much healthier.
Buffet is out AI is in, haven’t you heard?
This is such a bad metric you can only find it on WSB
He sees nothing, move over grandpa, its time for AI AND NUCULAR
To be fair… 2021 may be an indication of what happens at this level.
This means it’s time to buy calls
It means the government is going into debt to pump liquidity into the market.
https://preview.redd.it/jb8zxciue6vd1.jpeg?width=1168&format=pjpg&auto=webp&s=8caea1ecfa84059f48065223585ee813be496402
BUY LEAPS!
A financial indicator before the internet was a thing, might as well use the cavemen fire etf
Calls, stonks only go up
Back in my days buffets were simply a place to eat, now they are economists.
I hear that we are sliding into financial doom every day since Covid started.
Take this boomer logic somewhere else
SPY ATH as usual
Buffet that guy that sold apple at the bottom?
Buffet got lucky.
According to this graph, the indicator has been above peak dotcom levels permanently for basically 4 years at this point and equalled those levels like another couple of years before that.
So as much as I would like to see a correction, this just isn’t a good indicator even at the surface level.