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Why Warren Buffett Is Worried About Stocks
According to a 2001 Fortune interview, Warren Buffett believes that Market-Cap-to-GDP is "probably the best single measure of where valuations stand at any given moment." As Doug Short shows in the following charts, we suspect Warren is a little more than worried about the valuation of his portfolio (unless of course, it's different this time).
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The raw data for the "Buffett indicator" only goes back as far as the middle of the 20th century. Quarterly GDP dates from 1947, and the Fed's B.102 Balance sheet has quarterly updates beginning in Q4 1951. With an acknowledgement of this abbreviated timeframe, let's take a look at the plain vanilla quarterly ratio with no effort to interpolate monthly data or extrapolate since the end of the most recent quarterly numbers. Here is a chart I created using the Federal Reserve Economic Data (FRED) data and charting tool.
That strange numerator in the chart title, MVEONWMVBSNNCB, is the FRED designation for Line 36 in the B.102 balance sheet (Market Value of Equities Outstanding), available on the Federal Reserve website here in PDF format.
For those of you who may have reservations about the Federal Reserve economists' estimation of Market Value, I can offer a more transparent alternate snapshot over a shorter timeframe. Here is the Wilshire 5000 Full Cap Price Index divided by GDP, again using the FRED repository charting tool.
So... Both the "Buffett Index" and the Wilshire 5000 variant suggest that today's market is at lofty valuations, now above housing-bubble peak in 2007.
So, given the unprecedented beta (and very little alpha) of Berkshire Hathaway's stock price to the market...
We suspect Warren is worried...
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Mentioned this elsewhere, but I think I'll also just leave this here:
http://www.silverdoctors.com/4th-banker-in-past-week-found-suicided
Seems appropriate, somehow.
Since when does GDP mean anything?
Title is incomplete, wording should be "Why Warren Buffet is Pretending to be Worried about Stocks"
the guy is 95 years old, has cancer, and the last time stocks crashed he got himself bailed out and made a fortune. He's worried about stocks....yup...
Bailed out and still paying the per tx rate of a bus driver
Re: per tx rate of a bus driver
Sure, but if you taxed all of Warrens loot and gave it to the corrupt government what would they do with it?
Just bomb some sandbox or increase the size of Big-PoliceState.
You can either let the top 10% keep all their loot OR let the government take the loot which will be distributed to a different group of top 10%'ers leaching off the government.
The best thing is to get in on a good corporate or government scam yourself, because the scams are the only way now.
So, the govt shd let them keep all their money AND bail them out? Nah. Price of a bailout, Jack
Re: So, the govt shd let them keep all their money AND bail them out? Nah. Price of a bailout, Jack
Oh, well, yeah... I agree with you on that. The bailout shouldn't have happened, but - well - Big-MIC should have been disbanded at some point and all the leaches living off of Big-AG should have been arrested too.
But, in reality, you can tell the adults from the children by how well they scam the dumbasses and live happy duplicitous lives. So, Warren is no worse - or better - than some defense contractor/worker parasite or wealthy farmer being paid not to grow on his "farm".
As REAL Mericans I think we should celebrate those who are smarter-n-savvier scammers than the average dumbass. We really aren't all above average self-actualizing individuals, but the scamers truly ARE.
It's a good thing they decided to change GDP calculation by adding 'intangibles' last year (thereby adding a couple percent to GDP) or else Uncle Warren would be really worried.
So we could easily see a 50% drop in equities very fast especially since GDP projections are being cut.
Re: So we could easily see a 50% drop in equities very fast especially since GDP projections are being cut
No, you have the add back the "wealth effect" and the "viscosity of money". So, it should double.
"Title is incomplete, wording should be "Why Warren Buffet is Pretending to be Worried about Stocks" "
No, it should have read "Why Warren 'Fuck You, Taxpayers' Buffet WOULD be worried about stocks IF NOT FOR BERN-YELLEN."
That's right. If I were Warren, the only thing I'd be worried about is waking up in the morning.
Hi Fonz, off topic but I just listened to Peter schiff talking about his interview on Jon Stewarts Daily Show. I remembered our discusion where I told you that Jon stewrat is just a mouthpiece for the establishment left and that nothing about the show is real. You disagreed, here's proof. If you haven't seen the video yet, watch the link.
The Truth Behind my Daily Show Interview
http://www.youtube.com/watch?v=F9LNP-yXXUc&feature=c4-overview&list=UUIj...
I see u still misunderstand every aspect of what i was saying. no point in rehashing it. but what is interesting is I said that he would spearhead the agenda as the fed looks to discredit people like him through the msm...and boy did he ever. the other thing i said is he was a smart dude. apparently a lot smarter than schiff who fell right in the trap that show set for him.
This only exemplifies the fraud that the MSM is, everything is orchestrated to fit a liberal political agenda. You're ok with this and Schiff is the idiot? Wow, I never knew you were such a fucking liberal. I'm ok with that, I just don't want to hear you bitchin about any of your neighbors in the Hamptons or your progressive NY politicians.
My god you are neanderthal dumb. i'm not okay with it. I am just pointing it out. Yes Schiff is a fucking idiot for not noticing it and falling right into it's trap. I mean even you know it's a trap and you can't seem to reconcile the difference between me pointing it out and endorsing it. It's two different things. And no i'm not a fucking liberal so stop being such a fucking faggot.
when did i say i was okay with it? I said he is an evil motherfucker because he knows what he is doing. Jon stewart is smart. his audience is dumb. Anyone at this point on the left or right is fucking dumb and he wins over a lot of people on both sides. he comes off like some liberal who can reach across to the other side. the msm champions him and he plays to it well. He is better at it than most. Him doing that to Schiff only exemplifies what a fraud it is...to people on here with a brain. The minority. The dumb sheep (BOTH FUCKING PARTIES...I can't tell u how many repubs I know that say "that Jon Stewart is alright") that love him only buy into him more. that does not mean i'm okay with it and i'm done with your ad hominem bullshit and putting words in my mouth.
What's wrong with Neandethals?
I took issue with you for thinking Schiff is an idiot for falling into their trap. That means you somehow accept these traps as normal course of business that he should have anticipated. That's a sad state we've come to where lying and fraud is to be expected. They didin't just lie to him they lied to their public audience and gave them fabricated propaganda. But besides ethics and legality, they have zero integrity and cannot be trusted in anything. This is typical of a biased MSM that has been doing this for years. Editing, lying and presenting 1/2 truths and fabrications as News to an unsuspecting audience. This and the edited CNBC zimmerman tapes are only the latest examples.
I really don't understand your admiration for Jon Stewart,
How smart do you have to be to read a script prepared by your producers? Maybe he reads them in a convincing, unbiased sounding, smart looking way. If not they'll do another take until they get it right But he's a puppet of the progressive establishment and makes a living deceiving people with a sublime politically driven agenda. Ok maybe you're not a fucking liberal but you are very confused. turn off the TV.
http://www.zerohedge.com/news/2014-01-25/introducing-%E2%80%9C-money-osc...
in case u missed it. check out the comments section...how many people even on here are fooled by him.
and regarding Schiff...i just think he should never have gone near them. he knew they had an angle and he was going to be the bad guy. why bother with it?
I'm sure his disowned grand daughter could tell you how concerned ol grandpa buffer is.
Same over glorifed piece of shit different name
rinse repeat
Stop the presses! CNBC will have to fly Becky to Omaha for an "interview".
Fuck you Warren.
these are minnows, inconsequential...i mean if it was a big fish hooked up, like a Larry Motherfuckin Finkster or a Chucky Evans, then the real game begins.
Shouldn't he be more worried about the Keystone Pipeline? His Fairy Godfather is.
ZH already covered this story a week ago (see here). It's also just 3 bankers, not 4, the silverdoctors story is including some exec from Tata motors in the count and that's a complete red herring.
Mea culpa, seek. Far be it from me to spread misinformation. Must have got over-excited for a minute there.
Have to admit this comments section is the best place to get discussion on any news item out there.
Because the Dow hit new highs and Becky still won't give him a Quicky?
Come on, she had her orthadontia and wouldn't want to expalin the stains to her dentist....
Jeeezzz..
She still needs funding for the bottom front
Well isn't that nice - Short of the month: Berkshire Hathaway.
All these superstar stock pickers that got rich on a parabolic then paraded around like the second coming. Lol.
Keeping those riches has always been the problem.These in bred idiots
start to belive its their acumen , not crony capitalism that made them
richer than us.Many will go down with the Titanic.
Hope there's some non-gmo popcorn available as it transpires.
SPX still tracking USDJPY by the tick like a beagle in heat
SPX was pretending to be the USD a couple of weeks back, even though it defied all logic. More like a MMORPG than a stock index.
Well, assuming GDP means anything anymore I guess Warren might be worried.
I'd be more worried that GDP is actually a function of market value: in which case I'm not sure of what the result of something divided by a proportion of itself represents.
Just because you can doesn't mean you should. Arrest Warren Buffet. Redistribute his stolen wealth.
Why worry... Altucher 20,000!
I'll see your Altucher 20,000 and raise you a James Paulsen Wells Cap DJI 40,000!!
In between Altucher 20,000 & James Paulsen Wells Cap DJI 40,000 lay -
James Glassman Dow 36,000
If you're all in w Altucher and Glassman, I see you and raise you a James "Buy Buy Buy" Cramer and 75,000! CALL!
Let's hope Janet keeps the engine of "Keynesian" happiness running at full throttle.
Ridin that nitrus fueled chopper flyin her Hell's Angels 1%-er colors!!
delete
Buffett worried about buying stocks? At his age, he should only worry about buying green bananas.
http://www.youtube.com/watch?v=oShTJ90fC34
SO, he is MOAR worried than in Q1/2009? I don't think so.
Its a little disingenious to suggest Buffet expresses current worry when basing this on a 2001 article. I'll admit Buffet has held belief in the Market Cap to GDP ratio, but this headline suggests he (re)expressed something today. This doesn't pass the smell test IMO.
...... Don't worry, be happy, short the BBH... They can't get it green today.
http://finviz.com/quote.ashx?t=incy&ty=c&ta=1&p=d
http://finviz.com/quote.ashx?t=bbh&ty=c&ta=1&p=d
If I were 90 something years old and worth 10s of billions I would only concern myself with sticking my dick in as many hot looking tight 19 year old pussies as I can buy.
Re: tight 19 year
Maybe he's one of the lucky ones who has lost his sex OCD. Now he's got time for other hobbyies, like model trains (or something).
The data here is from the St. Louis FRED.
http://www.vectorgrader.com/img/srv.php?id=value_market-cap-gdp_sp_10y
Uncle Warren should shuffle in front of a speeding bus.
Then he should be embalmed and sent to a gas station in the midwest where people can buy Cherry Coke and rub his forehead for luck....
It is clear that we have reached a new permanent high plateau, a new paradigm; this time it really IS different.
The one and ONLY answer to the debt problem is to declare it null and void because of FRAUD! It is fraud because it is mathematically impossible to repay ! It can not be repaid because the interest is never created on the loan and that is fraud ! And fraud voids all ! If we don’t void all out of thin air debt the bankers will own almost EVERYTHING ! And we will be homeless slaves ! They have a license to counterfeit ! Can I counterfeit the money to repay the loan ? Why not ? If we even attempt to repay a impossible debt (the national debt) all we do is show our ignorance ! The way to fix this mess is so simple a 3rd grader can figure it out ! We void the fraudulent debt! and everyone keeps ALL the items they have so called debt on ! And then we start to use a debt free currency and / or gold and silver ! And then we will have a robust economy like never before — OR WE LET THE BANKERS STEAL EVERYTHING !
I was in about the third grade when the news was talking about the national debt and I asked my dad who do we owe money to and who could possibly be richer than the United States? and where did they get the money? And then my dad took a gulp off his beer and said we owe it to our self ! I said that’s the dumbest thing I ever heard of ! that’s like me borrowing from my right pocket and setting fire to the interest and putting the rest in my left pocket ! This was about 1972 ! But Dad was wrong! We owe it to international Bankers running the biggest Ponzi scheme on earth called The Federal reserve system! And yes it really is this simple ! The bankers have a shoe in on ALL loans they make ! All they have to do is stop lending and then start foreclosing on ALL debts!-meaning they now own everything that has a debt by having a license to counterfeit ! So we 1 keep getting fleeced by continuing to pay this fraudulent scheme ! OR 2 we declare ALL out of thin air debt NULL AND VOID because of FRAUD ! And we ALL keep everything we have so called debt on! MOST people don't get this part Every car, boat, house, machine, tool, farm,ect. has already been paid for by the fraudulent paper! So no one looses ! WE sure as hell cant give it to the banksters! (let them steal it) AND IT DOESENT MATTER IF YOU WANT TO REDUCE THE DEBT 90% ITS STILL UNPAYABLE! So when we void the FRAUD This will be the ultimate FRESH start for everyone ! Share this if you want THE solution to the WORLDS problems! If not everything will continue to get worse until we have HONEST DEBT FREE MONEY /and GOLD AND SILVER ! And there is plenty of gold and silver! just Divide the paper money (FRN) by the gold /silver and you have the value of them! NO MATTER WHAT IT COMES TO per OZ ! Then we would be happy to work for SAY A ONE OZ. SILVER COIN A day ! Because NOW REAL MONEY will buy what $100 did before the reset! THINK ABOUT IT! This is what Scripture calls the jubilee !
Instead of writing puts, Warren old buddy will just roll over and write calls.
Warren doesn't give a flying fuck - he makes billions on both sides of the market.
The old coot will pass the reigns over to somebody else while he's on top. The next boob will be the fall guy.