MyPlanIQ submits:In his 2001 Fortune magazine article, Warren Buffett used the ratio of the market value of all US publically traded securities to Gross National Product (GNP) as a yardstick to measure the stock market valuation. He stated, Complete Story »
MyPlanIQ submits:Warren Buffett created a ratio of the market value of all US publicly traded securities to Gross National Product (GNP) as a yardstick to measure stock market valuationMyPlanIQ has been tracking this index and presents the current status. This will be reported every other week (bi-weekly)
ByAharonovich Management:Do you respect Warren Buffett and value his opinion? I'm sure you do. There's no reason why you wouldn't.In my previous article I pointed out that the U.S. economy doesn't seem to be in a good shape and that the markets are underestimating the "1/4 Cliff" as well as the sequestration immediate implications on consumption.
For the first time since the recovery began, Warren Buffett’s favorite valuation metric has breached the 100% level. That, of course, is the Wilshire 5,000 total market cap index relative to GNP. See the chart below for historical reference.
The stock market is off to its worst start in history this year. Not only that, the losses over the past few weeks have come amid one of the most rapid declines over the past few decades. This has some coming to the conclusion this has to be buying opportunity.
I’ve seen plenty of headlines and articles lately featuring advisors suggesting investors ‘stay the course’ or even ‘buy into the depressed prices.’ But is this really good advice for the average investor?
By Jason Tillberg:One valuation metric for identifying what markets are cheap and what markets are expensive is to compare the market cap of the country's entire stock market relative to the same country's GDP. This article attempts to observe not just the U.S. stock markets, but global markets as well.
By Cullen Roche: For the first time since the recovery began, Warren Buffett's favorite valuation metric has breached the 100% level. That, of course, is the Wilshire 5,000 total market cap index relative to GNP. See the chart below for historical reference.
By Cullen Roche: It's been an amazing run in the stock market. But I have to admit that I start to feel a bit uneasy about things when I see all news reported as good news, because it either means the economy is getting better or more QE is coming. That wouldn't bother me so much if corporate earnings were still booming and the economy was growing strongly, but neither one is occurring. In fact, the market is just driving higher on what looks like sheer optimism of continued QE and little else.
Cullen Roche submits: As the market continues to grind higher each and ever day, it’s useful to gain some perspective on just how much Bernanke is impacting valuations and generating disequilibrium in the market. In order to do so we’ll review a number of long-term valuation indicators.