Market Cap To Gdp Ratio Chart
This interactive chart shows the ratio of the dow jones industrial average to u s.
Market cap to gdp ratio chart. Dow to gdp ratio. The lowest in the last two decades has been 42 in fy04. As of 08 07 2020 this ratio is 176 6.
Market cap to gdp is a long term valuation indicator that has become popular in recent years thanks to warren buffett. However the number of listed and traded companies then were much lower than today. Just like the wilshire 5000 it is a capitalization weighted index.
The s p 500 consists of 500 large us companies. This ratio since 1970 is shown in the second chart to the right. The four valuation indicators we track in our monthly valuation overview offer a long term perspective of well over a century.
The s p 500 consists of 500 large us companies. The total market valuation is measured by the ratio of total market cap tmc to gnp the equation representing warren buffett s best single measure. The ratio has been quite stable over fy15 19 in the 70 80 band.
Market cap to gdp ratio has fallen swiftly from 79 as on fy19 to 58 fy20e gdp much below long term average of 75 and closer to levels last seen during fy09. Back in 2001 he remarked in a fortune magazine interview that it is probably the best single measure of where valuations stand at any given moment.