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Two weeks ago, I wrote about Warren Buffett’s favorite tool for measuring the overall valuation of the market: the ratio of total market cap to GDP. Today, we’re going to dig a little deeper into that analysis and compare the U.S. market to 20 other countries you may be interested in investing.
Take a look HERE at a chart showing the current market-cap-to-GDP ratio within the context of its historical range. You will find the results very interesting!
Conclusion: Most European countries look cheap both in comparison to the U.S. market and in comparison to their own historical ranges and Chinese & Japanese stocks are some of the cheapest in the world by this metric.
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