Warren Buffett's favourite Indicator Says Stocks Still Cheap

The latest total market capitalisation (TMC) to U.S. GDP ratio from Gurufocus still shows stocks to be relatively cheap vs. recent history. Note this is the metric Warren Buffett described as “probably the best single measure of where valuations stand at any given moment.”

The current 77% Total Market Cap / GDP ratio isn’t much higher than 2002’s trough valuation. Yet bears would highlight how much lower this ratio used to be during the 80’s.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.