Exploring the limitations of the Buffett indicator in predicting market crashes, this chapter analyzes India's $5 trillion stock market capitalization and concerns over market overvaluation. The focus is on the significance of forward price to earnings ratios in assessing market valuation, particularly in light of the rising number of companies trading at high multiples of their forward PE ratios.
In today’s episode for 24th May 2024, we talk about the famous Buffett Indicator and why it may not always predict stock market crashes or draw a fair picture of the economy.