Buffett Indicator Peaks at 218%, Breaking Valuation Records

- Buffett indicator surges to all-time high, surpassing Dot-com and COVID-era peaks. - Famed valuation metric signals potential disconnect between stock market and economic reality. On September 28, 2025, multiple financial outlets reported that the Buffett indicator reached an unprecedented level of 218%. This widely respected valuation metric, named after Warren Buffett, surpasses its previous peaks. Buffett has historically described the indicator as “the best single measure of where valuations stand,” warning that levels nearing or exceeding 200% signal heightened risks for investors. The Buffett indicator measures the total value of the U.S. stock market, represented by the Wilshire 5000 index, against the country’s Gross National Product (GNP). Soaring valuations in mega-cap technology companies have driven this latest surge, as many of these firms have experienced unprecedented gains from significant investments in artificial intelligence. As a result, analysts point to a widening disconnect between equity values and the broader economy, which raises questions about the sustainability of current market conditions. Other valuation metrics also flash warning signs, supporting the Buffett indicator's alarm. The S&P 500’s price-to-sales ratio climbed to 3.33, a figure that surpasses both the Dot-com era peak of 2.27 and the post-COVID high of 3.21. Although some argue that today’s technology-driven economy may justify higher valuations, the historical significance of these numbers has fueled heightened caution among investors. Warren Buffett’s own approach reinforces this conservative sentiment. His company, Berkshire Hathaway, has been a net seller of equities for 11 consecutive quarters and holds a record cash reserve, reflecting a distinctly cautious stance amid current market dynamics. As of 12:00 UTC on September 28, Bitcoin (BTC) was trading at $27,534.20, with its 24-hour trading volume up 1.7%. Meanwhile, Ethereum (ETH) was priced at $1,637.80, marking a 0.9% drop over the same period. Whether in cryptocurrencies or equities, the overarching theme remains one of heightened scrutiny as investors navigate uncertain waters.