📊 Modern Buffett (P/S)
P/S = S&P 500 Price / Revenue per Share
A revenue-based valuation metric that avoids earnings manipulation. Unlike P/E, revenue is harder to game through accounting choices, making P/S a cleaner signal for broad market valuation.
<1.5x — Significantly Undervalued
1.5–2.0x — Modestly Undervalued
2.0–2.8x — Fair Valued
2.8–3.5x — Modestly Overvalued
>3.5x — Significantly Overvalued
💰 Equity Risk Premium
ERP = Earnings Yield − 10Y Treasury
Measures the excess return stocks offer over risk-free government bonds. When the spread compresses or turns negative, bonds become more competitive — a critical cross-asset signal for asset allocation.
>5% — Stocks Very Attractive
3–5% — Stocks Attractive
1–3% — Neutral
−1 to 1% — Bonds Competitive
<−1% — Bonds Preferred
📈 Classic Buffett (Cap/GDP)
Ratio = (Market Cap / GDP) × 100
Warren Buffett's "best single measure" of market valuation. Compares total stock market capitalization to the GDP, revealing whether stocks are priced above or below economic output.
<75% — Significantly Undervalued
75–90% — Modestly Undervalued
90–115% — Fair Valued
115–140% — Modestly Overvalued
>140% — Significantly Overvalued