Buffet Indicator

Definition:

The Buffett Indicator (aka, Buffett Index, or Buffett Ratio) is the ratio of the total United States stock market to GDP.

$$ \text{Buffett Indicator} = \frac{\text{Total US Stock Market Value}}{\text{Gross Domestic Product (GDP)}} $$

As of September 30, 2024 the ratio values are:

This ratio fluctuates over time since the value of the stock market can be very volatile, but GDP tends to grow much more predictably. The current ratio of 208% is approximately 66.62% (or about 2.2 standard deviations) above the historical trend line, suggesting that the stock market is Strongly Overvalued relative to GDP.

Note that this range might change! ( US Markets Represents 70% of Total World Market Capitalization:):

 A fair valuation of a market would fall into the 75% to 90% range.