Buffett and Stocks

Famed investor Warren Buffett is the subject of a piece in the February 4 Fortune article titled Buffett's metric says it's time to Buy." The article details the relationship between stock prices and GDP (Gross Domestic Product= the sum of all goods and services produces in our domestic economy). The valuation reached a peak in March 2000 of 190% (the value of U.S. stocks was 190% of GDP).  During WWII this range was as low as 40-45% and tested those same levels in the early 1980's. Buffett says " If the percentage relationship falls to the 70-80% area ,buying stocks is likely to work very well for you." At present the estimate is about 75%.