Warren Buffett’s Favorite Market Gauge Has Blown Past a Level He Once Called a Warning. History Says This Comes Next.

The Buffett indicator, measuring total stock market capitalization to GDP ratio, has surged to an all-time high of 237%, exceeding the 200% level Buffett warned about in 2001. Historically, similar surges preceded major market crashes in 1929 and the dot-com bubble burst in 2000. While the pattern suggests caution, investors are advised to wait, build cash reserves, or invest in defensive stocks rather than panic sell.