Buffett Yardstick News Today

“Marriage is the triumph of imagination over intelligence. Second marriage is the triumph of hope over experience.” -Oscar Wilde Substitute “investing during a mania” for “marriage” in the quote above and you’ll understand what is going on in the stock market today. To wit, in 1999, Warren Buffett famously told a select group of wealthy individuals at a confab in Sun Valley: Investors in stocks these days are expecting far too much, and I’m going to explain why… A Paine We...

For reference, at the peak of the Dotcom Mania, this measure only reached 188% so we are now over 40% more expensive than the most expensive stock market peak in history! Another way to think about this is to understand that, at today’s valuation, the stock market would need to fall 30% overnight in order to match the peak of what is widely considered the greatest bubble in modern history. And not only is the current stock market bubble that much bigger than the previous record, it is also f...

Oil edges lower as traders focus on U.S. gasoline demand (WTI 65.14). Initial jobless claims fall but over 16 million Americans remain jobless. Here is the current market situation from CNN Money European markets are mixed. The DAX is higher by 0.06%, while the CAC 40 is leading the FTSE 100 lower. They are down 0.43% and 0.07% respectively. What Is Moving the Markets Here are the headlines moving the markets. Hedge Funds Bet On Higher Oil Prices Money managers intimate a growing confidence ...

The Buffett Yardstick, or total market capitalization of the U.S. equity market relative to the overall size of the economy, now stands at a gaudy 270%. For reference, at the peak of the Dotcom Mania, this measure only reached 188% so we are now over 40% more expensive than the most expensive stock market peak in history! Another way to think about this is to understand that, at today’s valuation, the stock market would need to fall 30% overnight in order to match the peak of what is widely ...