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How seriously do you take the "Buffet indicator" when it comes to evaluating the market?
Posted on 4/18/21 at 9:04 am
Posted on 4/18/21 at 9:04 am
Essentially it's just a ratio of total stock market value to GDP (although I seem to remember reading previously that it is GNP)
I want to say it's around 236% right now. The image below is from Feb 11th
quote:
According to Warren Buffett, “if the ratio approaches 200%…you are playing with fire.”
I want to say it's around 236% right now. The image below is from Feb 11th
5
Posted on 4/18/21 at 9:23 am to Powerman
It was probably a good gauge before monetary policy went off the rails. I don't think any traditional models/indicators matter anymore because we have no historical gauge to factor in the amount of money that has been injected into the system as in the past year.
Posted on 4/18/21 at 10:20 am to TigerTatorTots
We may have a completely different monetary system in 10 years so not even sure it matters. We may have a system where crypto is as prevalent as the dollar and it's like the technological singularity. No one knows what that system will look like.
Posted on 4/18/21 at 10:31 am to GhostofJackson
quote:
We may have a system where crypto is as prevalent as the dollar and it's like the technological singularity
Posted on 4/18/21 at 10:50 am to GhostofJackson
quote:
We may have a system where crypto is as prevalent as the dollar and it's like the technological singularity.
yea, CBDCs will be mainstream in 5 years and that will accelerate crypto adoption
This post was edited on 4/18/21 at 10:51 am
Posted on 4/18/21 at 10:53 am to boogiewoogie1978
Downvotes, yet most people don't realize that 97% of USD is digital. These were probably people downvoting that the whole world could be shut down for a year due to the flu. You really think it's a stretch at this point that a China pushed crypto rush could unfold this decade?
Posted on 4/18/21 at 10:54 am to rocket31
I’m not sure what problem the central banks think a purely digital currency resolves, because it seems it will just expedite and enhance the existing issues with fiat currency and introduce significant challenges to people’s right to privacy
Posted on 4/18/21 at 10:57 am to Ross
quote:
I’m not sure what problem the central banks think a purely digital currency resolves, because it seems it will just expedite and enhance the existing issues with fiat currency and introduce significant challenges to people’s right to privacy
agreed, it will only make the people on the sidelines more comfortable with digital assets. then theyll be like, "why am i holding this money which is controlled by the govt, when these other things over here are more open, transparent, and decentralized"
but i see dogecoin and am unsure on the adoption timeline
Posted on 4/18/21 at 11:07 am to Powerman
All models are wrong
Posted on 4/18/21 at 11:08 am to rocket31
The fact that people are all in on Doge also makes me think we are further away from people “getting it” with cryptocurrencies than previously thought
More of the crypto market is just in it for short term fiat gains rather than as an escape from/hedge against fiat than I personally thought; I think. At the very least they know nothing about the underlying technologies of the different tokens.
More of the crypto market is just in it for short term fiat gains rather than as an escape from/hedge against fiat than I personally thought; I think. At the very least they know nothing about the underlying technologies of the different tokens.
This post was edited on 4/18/21 at 12:47 pm
Posted on 4/18/21 at 11:21 am to Ross
agreed. might be wise to eventually start preparing for another bear market. I don't think we will see another 80% drop like 2017/2018 but the doge phenomena signals that the market is still too young. there are potential catalysts that could change my mind back to more bullish but I'm remaining neutral right now
Posted on 4/18/21 at 11:48 am to rocket31
quote:
more open, transparent, and decentralized
Yikes
Posted on 4/18/21 at 12:07 pm to Ross
quote:
More of the crypto market is just in it for fiat gains than as an escape from fiat than I personally thought; I think.
Uhhhh... yeah
Posted on 4/18/21 at 10:49 pm to Powerman
quote:
Essentially it's just a ratio of total stock market value to GDP (although I seem to remember reading previously that it is GNP)
Buffet admitted that this indicator depends on interest rates. Interest rates are historically low, so 236% at a 10 year yield of 1.7% is different versus 200% at a 10-year yield of 7%.
Need to know what interest rate the 200% ratio is applicable, then translate that to a 1.7% 10 year bond.
Posted on 4/19/21 at 12:27 am to Ross
quote:
The fact that people are all in on Doge also makes me think we are further away from people “getting it” with cryptocurrencies than previously thought
I don’t know, I’m sure there is a subset of people that actually believe doge holds real value. I think a significantly larger subset is people saying “oh the government decided to poof trillions of dollars out of thin air and give me $1200? If that’s how it works, let’s poof our own trillions!”
Obviously an American centric viewpoint but pretty much holds true for the rest of the world as well. I read the whole doge thing as people pointing out the absurdity of the established monetary system by doing the same thing, on meth, with memes...
Posted on 4/19/21 at 8:20 am to GhostofJackson
quote:
Downvotes, yet most people don't realize that 97% of USD is digital. These were probably people downvoting that the whole world could be shut down for a year due to the flu. You really think it's a stretch at this point that a China pushed crypto rush could unfold this decade?
Key word being USD. If you think the powers that be are just going to relinquish control of the monetary system then you are living in an alternate reality.
This post was edited on 4/19/21 at 9:25 am
Posted on 4/19/21 at 8:24 am to boogiewoogie1978
quote:You can still have the USD on a blockchain. Its the Fed dollar or CBDC type currencies governments are talking about creating. Its fiat paper moved to 100% digital on the blockchain. They will portray this as a safe alternative to bitcoin when in reality, going this route is awful for the common citizen. No privacy (as compared to cash), and allows for radical policies (i.e. expiring dollars or dollars only allowed to be spent at certain places, etc).
Key word being USD. If you think the powers that be are just going to relinquish control of the monetary system then you are living in an alternate realty.
Posted on 4/19/21 at 8:28 am to Ross
I look at it a bit differently. Doge is shite, BUT....honestly, it what mass adoption of crypto looks like. There has to be a crossover that puts normies into crypto. Just so happens that one of the most useless coins is the one. Between Elon and tik tok, it’s given a lot of people an introduction.
I think, in the short term, as new blood learns more about the system, you’ll start seeing people put their doge gains into BTC and other alts.....prolonging/perpetuating the bull run. That, in turn, opens the door for more shilling on social platforms and introducing more new people.
I think, in the short term, as new blood learns more about the system, you’ll start seeing people put their doge gains into BTC and other alts.....prolonging/perpetuating the bull run. That, in turn, opens the door for more shilling on social platforms and introducing more new people.
Posted on 4/19/21 at 8:34 am to Gr8t8s
quote:While true about being an introduction, I fear that they picked the one coin that dumps frequently, and dumps hard. Most of these newbies will get rekt holding the bags and have an awful mindset about the crypto space because of it.
I look at it a bit differently. Doge is shite, BUT....honestly, it what mass adoption of crypto looks like. There has to be a crossover that puts normies into crypto. Just so happens that one of the most useless coins is the one. Between Elon and tik tok, it’s given a lot of people an introduction.
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