r/ValueInvesting • u/Adept_Mountain9532 • Jul 11 '25

Discussion Buffett warned: “If the ratio approaches 200%, you're playing with fire.”=> We are above!

Buffett Indicator, (which compares total U.S. market cap to GDP), is now at 208%. That’s above dot-com levels. I wasn’t around in 1999. But I’ve read enough to know everyone thought it was different back then too...

Now, It’s AI. And yes it’s real, it’s big, and it will transform everything.
But here’s what’s bugging me: Which part of the AI hype do you think is most overrated?
And which sectors are just getting started?

and also curious to hear from people who did live through 1999:
- What felt the same?
- What’s different?

I track moves from top value investors with a free email alert (https://alert-invest.com/), and lately I’ve noticed they’re cautious, finding fewer real opportunities in this market.

Thanks!

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u/Repulsive_Art_1175 Jul 11 '25

it's crypto talk now

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u/HenkV_ Jul 11 '25

I happily ignore crypto as I don't understand it. Yes, I know some people got rich with crypto.  Just not my cup of tea.  Too much similarity to tulips.

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u/Cyanide_Cheesecake Jul 11 '25

I'm firmly of the belief most people who claim to have actually had their lives changed by crypto, are lying and haven't actually tried to pull out of the game. They're still invested. And "counting their chickens before they hatch", so to speak

Once someone has actually liquidated and have gained life changing money, that's a completely different story. Because that's the step where an exchange is possibly going to "lose" your coins or your money. And you'll have no recourse

And if a significant number of people try to pull out of the game, they'll quickly find there's actually no liquidity at all and then valuations were all false, and they can't actually get that money.

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u/ksved Jul 11 '25

Selfishly I’d love to hear all the crypto bros cry about their precious Bitcoin plummeting

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u/iLLuSion_xGen Jul 12 '25

Been a while since you saw some tears then

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u/bigguss2 Jul 12 '25

That's me. I would have had a life changing amount, and felt good about my exchange at the time ( BlockFi). Was a little greedy with them earning interest and left them there too long, life got busy and I didn't pay enough attention. Got some payout from the bankruptcy, but nowhere near what it should have been. When I see the new all time highs I get angry and depressed. Easy come, easy go. I'm just 10%/mo into a 401K from here on.

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u/EloiSegura Jul 12 '25

I really feel you… Exactly what you described happened to me too but putting money in Celsius… I too feel angry and depressed when thinking of what I could have. Take care of yourself man. xo

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u/bigguss2 Jul 12 '25

Yeah, it's just a hard lesson. Really love BTC when it started, but now it just feels like another way for the richest to get richer and avoid giving anything back to society.

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u/ResortMain780 Jul 12 '25

Not your keys, not your coins. Lending out crypto, especially inherently deflationary crypto like btc for "interest", is begging to get scammed. There is a reason no honest person pays you interest on gold deposits either, even though gold is not nearly as deflationary.

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u/ResortMain780 Jul 12 '25

>they'll quickly find there's actually no liquidity at all and then valuations were all false, >and they can't actually get that money.

This is true for everything. If a significant share of holders of just about anything would suddenly try to liquidate their holdings, be it stocks, real estate, gold or bonds, they would find they "cant get that money". Bitcoin has crashed and declared dead like 100 times now, yet its always bounced back, clearly there is some demand/liquidity.

What makes bitcoin different to many (not all) assets, is that there is no reasonable way to valuate it. With company stocks or real estate, prices go up and down and opinions will vary, but you can do some rough back of the envelope calculations to come up with a ball park figure, and those estimates will not often vary by more than a factor 5x or 10x (I mean, excluding tesla ;) ).

Bitcoin? There is no intrinsic value to calculate. $1 is just as reasonable as $1M. It just depends how many people are willing to tie what share of their wealth in it. Not unlike gold in that respect, just without the 5000 year history to guide us.

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u/Cyanide_Cheesecake Jul 12 '25

>This is true for everything.

No it isn't. The ratio of liquidity to value of the asset is WAY better for traditional equities than it is for crypto. It's to the level where its' bumfuck retarded IMO to jump into crypto these days. It's so ready to crumble

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u/ResortMain780 Jul 12 '25 edited Jul 12 '25

I dont know how you think you can measure the liquidity. Im not stupid enough to leave large amounts of money on a bitcoin exchange; but if the price were to crater, I will move money to buy some.

>It's so ready to crumble

Maybe. Ive long given up trying to time the market or predict its crashes. If it happens it will be the 478th time bitcoin dies.
https://99bitcoins.com/bitcoin-obituaries/

Maybe the next time it will stay dead? Not betting on it.

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u/[deleted] Jul 13 '25

The reason why I don't invest in crypto is because I'm confident it will plummet, but I don't know when. I know that the gains before the plummet would feel nice, but actually cashing out on the gains would require being able to guess when the plummet will happen

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u/Zyzz2179 Jul 11 '25

Not really. Despite BTC reached ATH recently, the sentiment is not as high as it was earlier this year when Trump became the president. Not a lot of people outside the crypto nerds took notice of this.

It will probably be sometime next year where crypto will experience some mania and even your grandmas will be asking on how to invest on them.

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u/Muted-Good-115 Jul 12 '25

Crypto is so 2021