USMacroBETA

Buffett Indicator

Very Negative
CURRENT VALUE
233%
Source: Wilshire 5000 (continued on the Dow Jones U.S. Total Stock Market Index since Jul 2026) / BEA GDP via FRED
Data through: Sep 15, 2026 · updated Sep 15 · Updates: Daily (market cap), Quarterly (GDP)
The three bars show the last 3 months (end-of-month values) for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
Historical context: Currently in the 100th percentile historically — elevated vs historical norms.
What this means right now: The Buffett Indicator is significantly above 150% — the level Buffett himself identified as a danger zone. The stock market is worth more than 1.5x the entire US economy's annual output. Historical returns from these levels have been disappointing.
Buffett Indicator · Daily · 1989–2026
Grey areas = NBER recessions · Scroll to read · zoom and pan in Expand
Monthly values

Buffett Indicator — the last 12 months

Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.

MonthValueBand
Sep 2026233%Severe/critical reading
Aug 2026236%Severe/critical reading
Jul 2026230%Severe/critical reading
Jun 2026232%Severe/critical reading
May 2026238%Severe/critical reading
Apr 2026226%Severe/critical reading

Month-end readings of the same series the chart shows, from buffett_indicator. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.

What is the Buffett Indicator?

The Buffett Indicator divides the total value of all US publicly traded stocks by the US Gross Domestic Product (GDP). Warren Buffett famously called it "probably the best single measure of where valuations stand at any given moment" in a 2001 Fortune magazine interview. It answers the question: how large is the stock market relative to the underlying economy that produces the earnings?

When the ratio is near 100%, stocks are roughly worth as much as the entire US economy produces in a year — historically fair value. Above 150% signals significant overvaluation. Below 75% signals undervaluation. The indicator captures something the P/E ratio misses: you can manipulate earnings through accounting, but GDP is harder to inflate artificially. The denominator is the real economy.

How We Color-Code the Buffett Indicator

Our heatmap colors each indicator based on historically significant thresholds:

Below 75%
Significantly undervalued relative to GDP
75% – 100%
Fair value — stocks reasonably priced vs economy
100% – 120%
Moderately elevated — some overvaluation
120% – 150%
Overvalued — market running ahead of economy
Above 150%
Significantly overvalued — Buffett's own caution zone

Historical Extremes — What Happened Next?

When this indicator reaches extreme levels, history shows consistent patterns:

Dec 1999Dot-Com Bubble
140%
S&P 500 fell -49% over the next 3 years. This was the first time the indicator exceeded 150% — Buffett warned publicly about market excess.
Mar 2009Financial Crisis Bottom
Buffett Indicator: 57%
S&P 500 returned +169% over the next 5 years. Buffett was publicly buying stocks aggressively at these levels.
Nov 2021Post-COVID Peak
Buffett Indicator: 211%
S&P 500 fell -25% over the next 12 months. The highest Buffett Indicator reading in history preceded a significant bear market.

Investor Checklist — Current Reading

Based on the current Buffett Indicator reading of 233% (Very Negative):

⚠Above Buffett's own 150% danger threshold — proceed with caution
⚠Historical returns from these levels have been poor over 5-10 year periods
✓Consider meaningful allocation to international equities, bonds, or real assets
ℹRemember: high indicator can persist for years — it cannot time the market

Frequently Asked Questions

What did Warren Buffett actually say about this indicator?
In a December 2001 Fortune magazine article, Buffett said the ratio of total market cap to GDP is "probably the best single measure of where valuations stand at any given moment." He noted that when the ratio approaches 200%, playing with fire. He has referenced it in subsequent Berkshire shareholder letters as a key valuation benchmark.
What is the "right" level for the Buffett Indicator?
Historically, around 80-100% has represented fair value. However, the "normal" level has shifted upward since the 1990s due to increased corporate profit margins, globalization of US companies (whose foreign earnings boost market cap but not US GDP), and structurally lower interest rates. Some analysts argue 120-130% is the new fair value.
Why is the Buffett Indicator currently so high?
Several factors have pushed it above historical norms: US companies now earn a large share of profits overseas (boosting market cap but not US GDP), technology companies command high valuations relative to current earnings, and historically low interest rates for much of the past decade supported elevated multiples.
Is the Buffett Indicator better than the P/E ratio?
They measure different things. P/E measures price relative to earnings; the Buffett Indicator measures market cap relative to the entire economy. Buffett preferred his indicator because GDP is harder to manipulate than earnings. Most analysts use both together for a more complete picture.
Does a high Buffett Indicator mean a crash is coming?
No — high indicator signals poor expected future returns but cannot predict timing. The indicator stayed above 150% from 2020 to 2022 before a significant correction. It rose above 100% in 1996 and stayed elevated through 2000. Valuation is a long-term return predictor, not a short-term crash signal.