Buffett Indicator Update

She's so high
High above me
She's so lovely
--Tal Bachman

Nearly a year ago we discussed Doug Short's analysis of market cap to GDP--a valuation indicator made famous by Warren Buffett in a Fortune article near the top of the dot com bubble. Here's an update.

Market valuations have only moved further into nosebleed territory, eclipsed only by the dotcom zenith since 1950. To the extent that GDP may be over-reported, then current overvaluation estimates are conservative.

Doesn't mean that markets can't go higher or that things crash tomorrow. It does signify a significant wind in the face of further price advances.

position in SPX