Alec Hogg: Buffett Index suggests overheated market

I love visualcapitalist.com – a website which uses graphics to explain many complex aspects of economic life. The graphic above is a good example of the site's offerings – this one showing how valuations of US shares are now in unchartered territory, supporting growing concerns about asset prices..Also read: Alec Hogg: Deja Vu as our Power Hour returns to radio.The graph illustrates the now famous Buffett Index. Twenty years ago, Berkshire Hathaway's chairman suggested the best way to know if stock markets were under- or over- valued was by tracking the total value of all listed companies against the size of the US economy, its Gross Domestic Product..___STEADY_PAYWALL___.The visualcapitalist.com graph shows this Buffett Index has not been at current levels for at least 70 years – and is now even above where the peak of the internet bubble in early 2000. Quite an alarm bell. Not just for Wall Street, because when US markets catch a cold, the rest of the world gets pneumonia..Also read: Alec Hogg: It's a great time to fly domestically in SA.There is a counter argument: interest rates are at record lows assisted by unprecedented money creation by pandemic-panicked governments. So it is rational all this cash would find its way into tradeable assets, especially equities. Even so, savvy investors are paying attention, taking some profit off the table..NB FOR YOUR WALL STREET JOURNAL ACCESS….Because of The Wall Street Journal's credential requirements to access its site, your password MUST be at least 8 characters and include at least one letter and one number; and it MAY NOT contain any special characters (ie #, !, @ etc). To maintain access to WSJ.com, you MUST enter our partner's website at least once a month via BizNews Premium.And for your listening pleasure….Today's fresh audio on BizNews Radio.…..(click on the link to access).Bitcoin – is it better than gold, or is Roubini right and it's worthless? Medical Prof slams critics of Ivermectin – urges re-look at dataWarning – changes to Occupational Injuries scheme will cause chaos FB: Facebook caught cheating advertisers; GameStop exposed Inside Covid-19: Meet the 32yo SA lab assistant in global spotlightBitcoin's record price: Why this time really is different Drive Time with Jarryd Neves: BMW 320i Steptronic

Alec Hogg: Buffett Index suggests overheated market

Related Stories

Meet Tshepo Mahloele – Big Capitec shareholder, ABSIP’s “CEO of the Decade” now accused by Holomisa as kingpin of corrupt network

PREMIUM: Making of a great editor – the George Palmer playbook

Premium – BizNews global portfolio: ASML joins – so does Adobe as Bull takes hold again

Alec Hogg: Helen Zille predicts SA choice will be DA or EFF