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The Buffett Indicator and market crashes

Discussion in 'Investing' started by TomB16, Nov 20, 2018.

  1. TomB16

    TomB16 Active Member

    Joined:
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    Like everyone, I watch the Buffett Indicator (Total market cap / GDP) to keep an eye on market value. As it gets particularly high, I reduce or even stop reinvestment based on a childishly simple formula.

    As best I can tell, all but the most novice investors monitor the Buffett Indicator. This is new, since the last crash.

    I wonder how much the BI will affect market dynamics. It will have a cooling affect on hot markets that might otherwise overheat and blow up.

    Do you think the nature of crashes/corrections is going to change or perhaps has changed? I look forward to reading the insight of others.
     

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