The Buffett Ratio Remains High

That's where it was just before the pandemic in early 2020. By Q4-2021, it rose to a new record high of 2.8. Another version of the Buffett Ratio can be derived by dividing the S&P 500 market capitalization by S&P 500 revenues. It rose to 2.7 at the end of last year. Both series track one another closely, but they are available only quarterly.

We can monitor the Buffett Ratio on a daily basis using the S&P 500's forward price-to-sales (P/S) ratio. It has plunged from 2.8 at the start of the year to 2.2 yesterday. Similarly, the forward P/E has dropped from over 20.0 at the start of this year to 16.8 yesterday.