Warren Buffett's Favorite Stock Market Indicator Is Flashing Red — Dangerously Close To Reaching The Number He Says Is 'Playing With Fire'
In the realm of stock market indicators, the Buffett Indicator stands out, especially when it flashes red.
Named after Warren Buffett, the CEO of Berkshire Hathaway Inc. and a figure synonymous with investing acumen, the indicator compares the total market capitalization of all actively traded U.S. stocks to the latest estimate of quarterly gross domestic product (GDP). Buffett, in a 2001 Fortune magazine article shared by CNN Money, described it as “probably the best single measure of where valuations stand at any given moment.”