Warren Buffett Indicator for Indian Markets

Hat Tip: Sunchartist

Source: ET


4 replies on “Warren Buffett Indicator for Indian Markets”

MCap also increases due to new listings..Mcap to GDP is not accurate measure of market indicator.

The confusion is not on market cap. The confusion is in GDP figures which are different at constant prices, at current prices, new series, old series and GVA figures coupled with IIP numbers, etc.
This makes actual GDP figures open to criticism.
And that’s why ratio of market cap to GDP looks alarming.
It would not be so much high.

MCap to GDP is a crude indicator though not fully out of context. However, it has its own limitations.
And therefore, it has to be viewed alongwith other indicators also like PE/ P/BV, GDP growth, lead indicators and lag indicator for movement in economy, etc.

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