Warren Buffett, Back of the Napkin Market Valuation Tracker … Part 1 in Market Valuation Review Series

With on-line investment animal spirits accelerating in some of their antic spirits, we thought it a good time for a calmer, longer term view of some high level market valuation views.

Oh … have not heard of the animal spirits? …. Let me digress for just a minute. A collective group of folks are ganging up on companies that have large short interest. Short Interest? This means company’s who’s stocks have large amounts of investors betting the company will go bankrupt or at least eventually lose value. As we say often, when everyone is on one side of the trade/theory/belief, this can cause vulnerability on the opposite side. When a group gets together and buys in mass, a largely shorted company stock, it can cause a short squeeze, similar to the afore mentioned Tesla…

You may say “So What” and that is fair, but this can cause other areas of the market to become frothy (which we have been speaking of before) and it also speaks to the recklessness of a investor behaviors and their disregard for any type of safety.

Buffett VERY High Level Market Indicator Flashing Caution

Warren Buffett aka the Oracle of Omaha due to his investing prowess, rarely gives any of his broad market comments and always qualifies that he has no idea where the markets will go… as do we!

BUT,

Price is what you pay, Value is what we get!

Chart Via Jill Mislinski 1-5-21 (Advisor Perspectives)

That’s an all time high/expensive aka NOT CHEAP- just saying!

Let’s be careful out there! Anyone remember what cop show this quote was from?

Have a Great “Buffett Indicator Flashing Red” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

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