Buffett indicator for global stocks nears 110%, signals possible crash

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Warren Buffett's global market gauge soars to nearly 110%, signaling stocks are overvalued and might crash

in 2001. The famed investor and Berkshire Hathaway CEO called it"probably the best single measure of where valuations stand at any given moment."

The billionaire noted the indicator skyrocketed during the dot-com bubble, and said that should have been a"very strong warning signal" of an impending disaster. He added that buying stocks when the gauge reads 70% or 80% would likely pay off, but doing so when the ratio approaches 200% would be"playing with fire."

The global stock market has a way to go before reaching that level, but the Buffett indicator for the US alone currently reads 159%, a Markets Insider analysis shows. It has soared largely due to the S&P 500 and Nasdaq Composite gaining 13% and 29% respectively this year — but still remains

 

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