Buffet indicator
Buffet indicator founder
Buffet indicator is founded by Warren E. Buffet. He is richest stock market investor in the world. Who had net worth of 88 billion dollars. He is 6th richest person in the whole earth.
Buffet indicator
Buffet indicator says when market price is high we have to do less investment in market because when market is high or very bullish it has lots of chances to go down and when market is down or very bearish we have to do more investment because it has lots of chances to go up.
How we know when market is high or low.
It has formula-
Market cap to GDP ratio
Its mean when market cap is lower than GDP market is lower by price.
Market cap or market capital- when we add all shares' price of a country we get market cap.
GDP- gross domestic product - when we add all money produced by all companys' in a country we get GDP.
So, buffet indicator says when market cap is lower than GDP we have to increase our investment in stock market.
Warren E. Buffet is 6th richest person, you want to see the top 10 richest person click it
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