How Warren Buffett's favorite stock-market gauge can help investors make smarter decisions

Paul Morigi/Getty Images The Buffett Indicator isthe ratio of a country’s stock market capitalization to the overall GDP of the country. If the stock market is below 50% of the GDP, it is too low. Between 75% and 90%, the market is about right. Above 115%, it is overvalued on a relative basis. In late 2017 the market is over 130% of the GDP. It can help investors identify countries and sectors with undervalued stock markets. Warren Buffettis one of the most esteemed and reveredinvestorsof all ...