America's Current & Future Economic Situation - By Ted Kavadas
Tuesday, February 6, 2018
Stock Market Capitalization To GDP – Through Q4 2017
“Stock market capitalization to GDP” is a notable and important metric regarding stock market valuation. In February of 2009 I wrote of it in “
Does Warren Buffett’s Market Metric Still Apply?
Doug Short has recently published a post depicting this “stock market capitalization to GDP” metric.
As seen in his February 5, 2018 post titled “
Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator
” he shows two different versions, varying by the definition of stock market capitalization. (note: additional explanation is provided in his post.)
For reference purposes, here is the first chart, with the stock market capitalization as defined by the Federal Reserve:
click on charts to enlarge images
Here is the second chart, with the stock market capitalization as defined by the Wilshire 5000:
As one can see in both measures depicted above, “stock market capitalization to GDP” is at notably high levels from a long-term historical perspective.
summarizes my overall thoughts about our economic situation
SPX at 2648.94 as this post is written
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