Buffett Indicator and Recession
Buffett Indicator as of 20 May 2022.
The Buffett Indicator is the ratio of total United States stock market valuation to GDP. As of May 20, 2022 we calculate the Buffett Indicator as:
Aggregate US Market Value: $41.7T
Annualized GDP: $24.7T
Buffett Indicator: $41.7T ÷ $24.7T = 169%
By our calculation that is currently 29% (or about 0.9 standard deviations) above the historical average, suggesting that the market is Fairly Valued. We are coming off historical highs for this indicator.
While we wait for Q2/2022 GDP results due in Q3, another decline will confirm that the market is in a technical recession. From the recent earnings and situations, we are already in a recession.
While there are several ones who called out that the downtrend has reached a bottom. It would be prudent to be observing more. It is not over till the fat lady sings and we have yet to see the single "collapse" event or subsequent rippling effects.
I do not wish that my "forecast" to be true but I think that we need to be prudent to watch the market accordingly. It is good to be an observer for now.
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- KittyBruno·2022-05-22Thanks for sharing. The situation is unclear, and it is not clear whether the recession will last or hit bottom. Can you explain it in detail?2Report
- chaicka·2022-05-22Sharp in observations and analysis. Indeed having same perspective on yet to bottom out. Many still in slight ‘bubble’ zone yet to shed all off. 2022 war chests still building & waiting….. [Grin]1Report
- MyrnaNorth·2022-05-22Although I also think the market has hit bottom, I think the downturn may last longer and is unlikely to be reversed in the short term.2Report
- BaronLyly·2022-05-22I am more optimistic about the future of the market, and think that this is the critical moment for bottoming out and rebound.2Report
- AdrianTan·2022-05-23A temporary cool off is needed to temper the glut of demand from economies reopening1Report
- LawrenceLBC·2022-05-22thanks for sharing [smile]2Report
- Kmchan·2022-05-22thanks for sharing2Report
- Wealthliner·2022-05-22thanks for sharing2Report
- yeetmin76·2022-05-22Thanks for sharing1Report
- nick220·2022-05-23[Miser]2Report
- Vie84·2022-05-22[Smile]1Report
- Golobee·2022-05-22[smile]1Report
- spkek·2022-05-22[Like]1Report
- JeffreyLim·2022-05-22👍🏼1Report
- coltzilla·2022-05-22👍🏼1Report
- ruiping88·2022-05-22[呆住]2Report
- DEVIL25·2022-05-22👍🏻1Report
- MultiBaggers·2022-05-22👍1Report
- Taylee·2022-05-22👍2Report
- kyawkh·2022-05-22alright2Report