The “Buffett indicator” soared 133% and a stock collapse is feared in the coming months

Warren Buffet Index

Analysts say that Warren Buffett’s gauge anticipates that the global stock market is overvalued relative to the world economy. Is a new witch born?

Warren Buffett’s benchmark market indicator rose to a new high last Sunday, indicating that global stocks are highly overvalued and could collapse in the coming months. This index is used by investors to determine if the market is undervalued, neutral or overvalued.

As revealed by Investing and Markets Insider, the global version of the so-called “Buffett indicator” climbed 133%, well above its peak readings during the dot-com boom and before the financial crisis.

When Warren Buffett put into practice his own index, he estimated the values ​​in which it would move to define one environment or another: below 0.7 the market would be underweight; between 0.9 and 1 would be neutral; and from 1.2 we would move into an overvaluation scenario.

Market analyst Welt Holger Zschaepitz warned about the index’s record level: “Buffett Indicator yelling BUBBLE!” It is that in the market it is known that the “Buffett indicator” has predicted several of the most devastating economic recessions in the United States.