From Money and Markets:
If you’re invested in the stock market, there’s a good chance you are incredibly happy with how the last year has gone — but the so-called “Buffett indicator” is flashing some bad omens for Wall Street’s future.
The signal, named after Berkshire Hathaway’s co-founder and investor extraordinaire Warren Buffett, reflects the “Oracle of Omaha’s” simple approach to investing and stock valuation. It’s just the total stock market capitalization relative to U.S. gross domestic product.