Dear Reader,
Good morning,
Happy Constitution Day!
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AI "Wealth Window" is Closing Soon!
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And there could be trillions available to those investors who get in early.
And it just opened up a brief "wealth window"…
That will slam shut soon.
If you've missed out on new tech opportunities before…
I urge you, do not ignore this message.
HERE is everything you need to know.
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Today is our national Constitution Day to commemorate the signing of the U.S. Constitution on September 17, 1787.
And, it's bring Teddy to work day! My son Teddy is here with me and today I want to talk about the "Buffett Indicator" and what it means for the stock market.
Warren Buffett was asked years ago, "what's the best tool to use to determine if the stock market is overvalued?"
He said, basically, the ratio of market value-to-GDP.
In our country we have a GDP around $28.4 trillion a year.
Right now, the total value of the U.S. stock market is about $57.5 trillion.
So right now, that ratio is 202%. Meaning, the U.S. stock market's value is more than double its GDP.
This indicator has been a solid ratio to tell you if a stock market is overvalued.
But it's not going to tell you when a crash will happen.
Now, I have a chart on the Buffett Indicator going back to 1950…
I'm going to go through some of the history here just to show you how we can go through periods of euphoria and mass delusion and overall crazy for a very long time.
Buffett's indicator was overvalued in the "go-go" '60s with a lot of good corrections in there.
Then of course the 1970s saw a big crash after the euphoria of the 60s.
Then the last time Buffett's Indicator was this overvalued was right before the 2000 dot-com crash where it hit 201%, and then of course we know what happened after that.
Right now is the most overvalued it's been since then.
It's 63% higher than the historical trendline.
So basically, the total market cap of all stocks trades in relation to the GDP of the U.S. economy – this is the nature of it. And it usually trades 63% lower than it trades today.
And the last two times that it has traded this high, the market has really crashed.
Now, Buffett would tell you… any reasonable investor who's been around for a long time would tell you:
Don't try to time it.
When you see stocks that just go up, that are this overvalued, take in your sails...
Be patient.
If you see great opportunities, swing at them, but don't chase them. This is what I've learned.
And keep your guns loaded – loaded for bear…
Keep cash on the side earning safe income so that when a great opportunity comes across, you're ready to pounce.
I hope that with this side-money, like me, you're collecting decent returns in federal money market funds. I mean funds that invest in short-term U.S. government securities.
I recommend three I feel are very safe and deliver solid returns in this report.
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