Warren Buffett.

  • The global version of the “Buffett indicator” has reached a record high of 142%.
  • Warren Buffett’s namesake gauge divides the total market cap of global stocks by worldwide GDP.
  • Buffett said the indicator spiking before the dot-com crash was a “very strong warning signal.”
  • See more stories on Insider’s business page.

Warren Buffett’s favorite market indicator has surged to a record high of 142%, signaling US and international stocks are heavily overpriced and could plummet in the months ahead.

The global version of the “Buffett indicator” takes the combined market capitalization of the world’s publicly traded stocks, and divides it by global GDP. A reading north of 100% indicates the global stock market is overvalued relative to the world economy.

“BOOM! Global stocks have gained another $1.6 trillion in market capitalization this week,” Welt market analyst Holger Zschaepitz tweeted on…

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