Stock Market Bubble Watch: We’ve Passed 2007 and Are Closing In on 2000

By: Graham_Summers

We continue to see articles and comments in the financial media proclaiming that stocks are not in a bubble.

The people claiming this are either delusional or intentionally lying.

Most people would argue that Warren Buffett knows a thing or two about investing. He’s possibly the single most famous investor of all time and is widely thought to be one of the greatest, if not THE greatest investor in history.

Buffett’s favorite metric for measuring the pricey-ness of stocks is the Stock Market Capitalization to Gross National Product ratio. This was one of the key metrics Buffett cited when he arguing why the Tech Craze in the late ‘90s was a mania to avoid.

Below is this metric running back to the early ‘90s. As you can see, today this ratio is above its 2007 peak: a period that is widely known to have been a massive bubble.

Indeed, the last time the ratio was this high was in the fourth quarter of 1998… right before stocks went completely parabolic in the single largest stock market bubble of all time.

Put simply: the only other time stocks have been more expensive based on Buffett’s favorite valuation metric was during the single largest stock market bubble of all time: a period that everyone now acknowledges was utter insanity.

This bubble will burst just as the Tech Bubble and the Housing Bubble did.

And smart investors will use it to make literal fortunes from it.

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Graham Summers

Phoenix Capital Research

http://www.phoenixcapitalmarketing.com

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

© 2017 Copyright Graham Summers - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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