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Warren Buffett’s Favorite Valuation Metric Is Ringing an Alarm

  • U.S. equity market cap is more than double the nation’s GDP
  • Indicator highlights ‘remarkable mania’ in markets: O’Rourke
Warren Buffett

Warren Buffett

Photographer: Christopher Goodney/Bloomberg

With U.S. equity indexes rising to fresh records again this week, one of Warren Buffett’s most-famous catchphrases comes to mind: Investors should “be fearful when others are greedy.”

Any Buffett disciple who checks in on the billionaire investor’s favorite market valuation metric these days may get the urge to shriek in terror.