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Live indicator · Total US market cap vs US GDP

Buffett Indicator — Market Cap to GDP Ratio

Total US stock market value divided by GDP. Warren Buffett called it the best single measure of where valuations stand. Readings above 100% mean the market is worth more than the yearly output of the economy behind it.

Buffett Indicator

Market capitalization to GDP ratio. Warren Buffett's preferred valuation metric for the overall stock market.

Thresholds: Negative >150 • Warning ≥120 • Positive <120

NEGATIVE

Today's reading sits at the 99.6th percentile of 381 months since 1995.

Current Value
232%
3-month Change
+6.65
3-month % Change
+2.95%

Why this can crash the market

A stock market cannot grow faster than its economy forever. When the whole market is priced far above the country's yearly output, future returns can only come from earnings catching up or from prices falling. At this level there is little cushion left: one bad quarter for earnings or rates, and the same index funds that bought on the way up sell on the way down.

Historical Data

The last three years • Source: Yahoo Finance ^DWCF (Dow Jones U.S. Total Stock Market) / FRED GDP, quarterly

Buffett Indicator
232▼ 1 (0.55%) vs prevSep 9, 2026

What Is the Buffett Indicator?

The Buffett Indicator divides total US stock market capitalization by gross domestic product (GDP). Warren Buffett described it as "probably the best single measure of where valuations stand at any given moment."

How It's Calculated

  • Ratio = Total Market Cap / GDP
  • Uses Dow Jones U.S. Total Stock Market for total market cap
  • GDP data from Bureau of Economic Analysis
  • Historical average around 70-80%

Signal Thresholds

  • Below 80%: Undervalued
  • 80-120%: Fairly valued to stretched
  • Above 120%: Significantly overvalued
  • Above 150%: Extreme bubble territory

Historical Track Record

The ratio was high before every major market bubble in modern history: 146% before the 2000 dot-com crash and 109% before the 2008 financial crisis.

Dot-Com Peak (2000)

The ratio hit 146%, the highest reading at that time. The NASDAQ lost 78% over the next 2.5 years.

Financial Crisis (2007)

Reached 109% before the S&P 500 fell 57%. The ratio didn't return to normal until 2009.

COVID Crash (2020)

Was at 152% before the fastest bear market in history. Massive stimulus drove a rapid recovery.

Limitations to Consider

No single indicator is enough. This one has two known biases. US companies earn a large part of their revenue abroad, which lifts market cap against domestic GDP. And interest rates change what a fair valuation is. Read it next to the other indicators.

Get told when the Buffett Indicator moves

The GDP side of this ratio updates quarterly. One email a week when the score moved, with the current ratio and the other five indicators.

At most one email a week, and only in weeks something actually moved. No account, one click to unsubscribe, and the address is never shared.

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Methodology

Every formula, source series and threshold behind these numbers

The Buffett Indicator is provided for educational purposes only. Not investment advice. Past performance does not guarantee future results.