Global Buffett Indicator
Stock market capitalization as a percentage of GDP — a cross-country macro valuation gauge. Values above 100 % mean the market is worth more than the entire annual economic output.
1. The Indicator and its Relation to RG
MC = total stock market capitalization. GDP = nominal annual gross domestic product. Result in percent.
Both measure how stretched market cap is relative to economic fundamentals. GDP correlates with aggregate earnings; high Buffett readings tend to accompany high RG values.
The Buffett Indicator uses GDP as the denominator (economy-wide output), not earnings or book value. It ignores the tangible equity term and uses a single-year denominator rather than a smoothed multi-year measure.
2. Current Readings
| Country | Market Cap / GDP | Year | Level |
|---|---|---|---|
| United States | 216 % | 2024 | Very High |
| Switzerland | 211 % | 2024 | Very High |
| Japan | 157 % | 2024 | High |
| United Kingdom | 97 % | 2022 | Moderate |
| France | 85 % | 2018 | Moderate |
| China | 63 % | 2024 | Moderate |
| Germany | 44 % | 2024 | Low |
3. Historical Comparison (1990–2024)
Annual observations. Some country series end before 2024 due to World Bank reporting lags.
Source: World Bank — CM.MKT.LCAP.GD.ZS. Annual data. China series starts 2003; France/UK have reporting lags to 2018/2022.
4. Interpretation and Caveats
| Dimension | Detail |
|---|---|
| What it measures | Total equity market capitalization of domestically listed companies as a share of nominal GDP. A value of 100 % means the stock market is worth one year of economic output. |
| Buffett reference | Warren Buffett mentioned this indicator in a 2001 Fortune article as "probably the best single measure of where valuations stand at any given moment." It has since become widely cited, though Buffett himself noted its limitations. |
| Why Germany is low | Germany has a large bank-dominated financial system. Many major companies (Mittelstand) are privately held and not listed. The DAX 40 represents a much smaller share of the economy than the S&P 500 does for the US. |
| Why Switzerland is high | Switzerland hosts globally significant companies (Nestlé, Novartis, Roche, UBS) whose market cap vastly exceeds Switzerland's domestic GDP — they operate globally but are listed locally. |
| Why Japan is high | The Nikkei 225 and TOPIX encompass a very large share of the Japanese economy. The high reading reflects Japan's mature large-cap market relative to its GDP. |
| Structural differences | Cross-country comparisons are affected by: (1) share of economy that is publicly listed, (2) foreign company listings, (3) dual-class structures, (4) conglomerate discount/premium. Germany and France will systematically appear "cheaper" due to listing structure. |
| Relation to RG | Both metrics are high when markets are priced aggressively relative to economic output. The RG framework uses smoothed earnings and tangible book value at the firm level — more precise but also more data-intensive. |
| Data source | World Bank Open Data — World Development Indicators. Indicator CM.MKT.LCAP.GD.ZS. Annual. Reporting lags vary by country (US/DE/JP/CH updated to 2024; UK to 2022; France to 2018). |
Source: World Bank Open Data — World Development Indicators (CM.MKT.LCAP.GD.ZS). Fetched: 2026-04-19. Annual observations. Not adjusted for listing structure differences. This page is for research purposes only and does not constitute investment advice.