Buffett’s Indicator: The Market’s Overpriced Playpen 🚨

by

Stocks: the original rollercoaster that keeps pretending it’s not about to hurl you into financial nausea. 2025’s first seven months? A historic thrill ride starring the S&P 500, which dropped 10.5% in two days like a reality-show contestant realizing the prize is just a participation trophy. The Nasdaq dove into bear-market territory—because why should millennials have nice things?—while the Dow Jones tiptoed into “correction” land, which is Wall Street’s way of saying, “Oops, my bad.”

But hey, Trump’s tariff tantrum was just the plot twist Wall Street needed! Cue the third-act comeback: the S&P 500 just posted one of its strongest 90-day runs in 75 years. Records shattered. Confetti rained. Optimism bloomed like a dandelion in a hurricane. Except dandelions are cheaper than stocks right now, and that’s saying something.

Enter Warren Buffett’s favorite metric, the market-cap-to-GDP ratio, aka the “Buffett Indicator.” Spoiler: It’s screaming “sell” like a toddler in a room full of “WET PAINT” signs. The Oracle of Omaha’s pet gauge just hit 213%, which is 151% above its 1970-2025 average. To put that in perspective: If stocks were a startup pitch, Buffett would’ve left the room muttering, “This is what the `delete` key is for.”

The adult in the room keeps yelling, “We’re in a bubble!” (No one cares.)

Buffett, who’s been quietly unloading $174.4 billion of stock since 2022, must feel like the designated driver at a Wall Street kegger. His Indicator hit 195% in 2021 before the 2022 crash—then 144% in 2000 before the dot-com implosion vaporized $trillions. History isn’t repeating; it’s doing a mic drop.

But hey, why let a little thing like “valuation math” ruin the party? The average bear market lasts 10 months; the average bull stretches five years. Buffett’s playbook? “Be fearful when others are greedy, then buy index funds and ghost everyone for a decade.” It’s working—Berkshire Hathaway’s portfolio looks like the anti-Amazon: no flashy gadgets, just boring insurance companies and railroads. Boring pays.

Why Buffett’s calendar is just “Long Term” and a napkin sketch of a yacht

Yes, the market’s a ticking time bomb. Also: every recession since WWII has lasted less time than your average Netflix series’ cancellation window. The S&P’s 27 bull markets since 1929 lasted ~2.75 years; bears? ~9 months. Buffett’s not worried about the dip—he’s too busy calculating how many Oreos he can buy with his next dividend check.

So, will the Buffett Indicator’s record high trigger another crash? Probably. Will Buffett care? No. He’ll be sipping Cherry Coke in Omaha, muttering, “I told you so,” while the rest of us panic-Googling “how to barter with gold toilet paper.” The market’s a casino—just one where the house always remembers to tip itself. 🚀

Read More

2025-08-02 10:26