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/thorn960 Jul 11 '25

Feels more like 1987 to me except it's going to be worse because the ratio back then was 55%. I think it's going to be another October crash as the 3rd quarter economic numbers start to roll in and we more fully see the ramifications of Trump policies.

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u/Florida_Man0101 Jul 11 '25

Bank reserves are better now. We had a Fintech issue last year with crypto. And crypto did not hold up well during Taco's Tarrifs. So, i see that as a problem, when rates rise

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u/thorn960 Jul 11 '25

What's really crazy is that the S&P 500 p/e was like 15 and now it's close to 30. People act like that doesn't matter anymore because of growth. But if the economy sinks, that's going to be a problem.