Warren Buffett Has a Stark Warning for Investors as the Market Repeats a Pattern Seen Only Twice in 155 Years
When Buffett speaks, it can pay to listen.
Overview
Warren Buffett has retired from his position as the chairman of his holding company, Berkshire Hathaway. But as one of the most successful investors in history, it can still pay (literally) to listen to what he has to say about the market -- especially in this increasingly uncertain climate.
Let's dig deeper into Buffett's stark warning about investing right now, and explore what the repeat of a pattern not seen since the dot-com bubble could mean for the future of the S&P 500.
Details
Nobel Prize-winning economist Robert Shiller created the cyclically adjusted price-to-earnings (CAPE) ratio to highlight periods of unusually high market valuations. It works by dividing the current price of the S&P 500 by its average inflation-adjusted earnings over the past decade. The long time period helps smooth out short-term fluctuations to provide a clearer perspective on the index's valuation compared with historical norms.
Source
Originally published at www.fool.com.