matjone Posted March 10, 2012 Share Posted March 10, 2012 This is what Buffett says is the single best valuation measure for the whole market, but I don't know where to find it. Does anyone else? I can find GNP, and I can find some info on stock market cap, but I assume he includes debt in this too. It would be interesting to see the data for other countries as well. Link to comment Share on other sites More sharing options...
racemize Posted March 10, 2012 Share Posted March 10, 2012 I would also be very interested in that. Link to comment Share on other sites More sharing options...
tombgrt Posted March 10, 2012 Share Posted March 10, 2012 Maybe this helps? http://www.gurufocus.com/stock-market-valuations.php Link to comment Share on other sites More sharing options...
racemize Posted March 10, 2012 Share Posted March 10, 2012 Maybe this helps? http://www.gurufocus.com/stock-market-valuations.php That's pretty great. Dynamic updating ftw. Link to comment Share on other sites More sharing options...
matjone Posted March 11, 2012 Author Share Posted March 11, 2012 well, from the world federation of exchanges the 2011 eoy market cap values are NYSE 11.8 Tn Nasdaq 3.8Tn I'm having trouble finding current data for corporate bonds, but I think this would be around 8 Tn. GNP for 2011 was 14.6 Tn so the ratio would be around 160%. I am not at all sure if I am doing this right though. Link to comment Share on other sites More sharing options...
jacobwolinsky Posted March 11, 2012 Share Posted March 11, 2012 Here is Europe and country specific: Stats are from morgan Stanley-http://www.valuewalk.com/2012/03/european-shiller-pe-below-13-ero/ Link to comment Share on other sites More sharing options...
matjone Posted March 11, 2012 Author Share Posted March 11, 2012 Thanks for the replies, guys. I will take a look at both of those sites. Link to comment Share on other sites More sharing options...
stahleyp Posted March 12, 2012 Share Posted March 12, 2012 The problem with the gurufocus one is that it measure GDP instead of GNP. I don't think it makes a super huge difference though. Link to comment Share on other sites More sharing options...
fenris Posted March 12, 2012 Share Posted March 12, 2012 Is this metric not dependent on what percentage of companies is actually publicly traded? Does anybody have information on how that changed over time? Link to comment Share on other sites More sharing options...
matjone Posted March 12, 2012 Author Share Posted March 12, 2012 I am also wondering if you include debt, which gurufocus does not. The reason I thought you would is that in the article buffett said "all publicly traded securities", and not just equity securities. Also, he said that the ratio was close to 200% in 99-00, and the only way I could get that from the data I was pulling up was to include debt. Plus it makes sense. Would the market suddenly become cheap if everyone borrowed and bought back shares till the ratio was down to 70? Link to comment Share on other sites More sharing options...
matjone Posted March 12, 2012 Author Share Posted March 12, 2012 I wondered the same thing. Link to comment Share on other sites More sharing options...
WarrenWatsa Posted March 12, 2012 Share Posted March 12, 2012 I have heard that the right way to calculate it is the market cap of the Wilshire 5000 divided by GNP... Link to comment Share on other sites More sharing options...
Shane Posted March 12, 2012 Share Posted March 12, 2012 I understand the convention of using publicly traded companies, but to me this seems like there are a lot of obvious flaws. Maybe in the U.S. this has worked but what about if Private companies become a large part of the GNP? Anyone have input on this? Link to comment Share on other sites More sharing options...
anders Posted March 13, 2012 Share Posted March 13, 2012 Could anyone please explain the logic why Buffett states that it is probably the best measure? ??? Is it because, in overall, the comps cant grow faster than the economy as a whole..? but many of them are global - ie apple - so where does the logic come in to compare an index of international comps with us gnp figures..? Further, over the last 65 years, s&p500 has a higher CAGR (even excluding dividends) than US gdp. Would really appreciate if anyone could provide thoughtful insight into this. Link to comment Share on other sites More sharing options...
matjone Posted March 13, 2012 Author Share Posted March 13, 2012 From what I understand GNP includes foreign earnings of U.S. companies, and GDP does not. Link to comment Share on other sites More sharing options...
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