Not so scared

The Buffett-indicator is one of the preferred measures used by the famous value investor to evaluate the attractiveness of the overall equity market in terms of valuation. It is simply the market capitalization divided by the GDP. With this ratio below 100, global markets do not look stretched on this measure and do not scare us in terms of valuation as we approach Halloween. Unfortunately there 3 catches :  interest rates are rising, company profits are starting to disappoint and the US market is much more expensive than the other “forgotten” markets.