Warren Buffett’s Metric Says BUY!

February 4th, 2009  |  Published in Investing  |  1 Comment

warren-buffett-metric-chart

Famed investor Warren Buffett has a metric that says the best time to buy stocks is when the total market value of U.S. stocks is 70-80% of the output of the U.S. economy, the gross national product. Stock quotes are the source of this information.

Well, that’s where stocks were in late January, when the ratio was 75%. Nothing about that reversion to sanity surprises Buffett, who told Fortune that the shift in the ratio reminds him of investor Ben Graham’s statement about the stock market: “In the short run it’s a voting machine, but in the long run it’s a weighing machine.”

Buffett’s metric says it’s time to buy [Yahoo Finance]

  

Responses

  1. Moments of Fame « Funny about Money says:

    March 4th, 2009 at 10:05 am (#)

    […] Happy, at My Retirement Blog, reports that a Warren Buffett rule of thumb suggests it’s time to buy stocks; that would be nice if you had any cash left to buy […]