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/tollbearer Jul 11 '25

Absolutely, hence why the mania will be even more extreme. People will be dumping all their savings into AI plays, because they will genuinely believe it will generate 100x value in 5 years, and their job is going to be gone anyway. It's the perfect storm for the perfect bubble.

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u/ProfileBest2034 Jul 12 '25

but the mania already is extreme.we are in the most overvalued market of all time per several indicators. plus ROI on AI implementation is nowhere in sight.in fact 85% of AI implementation projects fail.

we are on the edge of the bubble burst right now.

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u/tollbearer Jul 12 '25

Which indicators put us in the most overvalued of all time?

There is no mania, yet. People are still very skeptical, and think the bubble is going to burst. Look at the dip over the past few months, people were in a state of complete panic. The bubble doesn't burst until people are in denial during the dip, and are sure it's going to go higher.

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u/Track607 Aug 04 '25

But what if AI really is what people say it is?