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Sean HymanSean Hyman
Keymaster
Post count: 4605

Since the economy doesn’t exactly equal the stock market, and since stocks are way out of line with the economy, it may not necessarily matter.

No Buffett (two t’s), he uses it to gauge how far away stocks have gotten from the economy to see how overvalued they may be, from that perspective. That ratio is more out of whack today with GDP than its been since its been tracked. A bigger gap than in the crash of 2000 or the crash of 2008.

So, you can improve 3rd quarter GDP all you want, and it will still be a mile away from where stock prices are right now. So how does that rectify itself? Stock prices have to have a massive correction lower.

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