The Buffett Indicator Triggered: Every Time It Hit 220%, the Stock Market Crashed 40-70% Within 18 M

Описание: The Buffett Indicator Triggered: Every Time It Hit 220%, the Stock Market Crashed 40-70% Within 18 Months

On January 11th, 2026, the Buffett Indicator—the metric Warren Buffett once called "probably the best single measure of where valuations stand at any given moment"—hit 223 to 224 percent. This isn't just a number. This is a warning signal that has preceded every major stock market crash in modern history.
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The last three times this indicator reached extreme levels:

1929: 189% → 89% market decline
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2000: 150% → 76% Nasdaq decline
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2007: 110% → 57% S&P 500 decline
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Today we sit at 223%—the highest level EVER recorded in American market history. The historical average is 80-100%. When it exceeds 200%, something breaks.
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What You'll Discover:

How the Buffett Indicator works and why Warren Buffett uses it to predict crashes
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Exact comparison: January 2026 (223%) vs. 1929 (189%) vs. 2000 (150%) vs. 2007 (110%)
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The Shiller CAPE ratio at 40.58—second-highest level in history, comparable only to 2000 peak
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Why the historical average is 17.3, and what it means investors are paying 135% more than normal
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The five-stage cascade process: How crashes unfold mechanically from valuation trigger to complete repricing
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Margin debt at $950 billion—$1 trillion, growing twice as fast as stock prices (1929, 2000, 2008 parallels)
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Q1 2026 earnings disappointment as the likely trigger event (exactly 4.5 months away)
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Index rebalancing forced buying collision—why passive funds can't stop the cascade
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The mathematical certainty: Valuations this extreme MUST reprice, either through price decline OR earnings growth
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Portfolio sequence-of-returns risk for near-retirees (the nightmare scenario revealed)
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How young accumulators can actually benefit from buying stocks at depressed valuations
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Historical precedent: 1932 Depression buyers vs. 2009 financial crisis buyers (20+ year returns analyzed)
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The timeline: 18-month window from trigger to potential 40-70% decline
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Why the Fed is trapped between cutting rates (to support growth) and raising rates (to fight inflation)
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Critical Data Points:

Buffett Indicator: 223-224% (Highest Ever Recorded)
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CAPE Ratio: 40.58 (Second-Highest in History)
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Margin Debt: $950B-$1T (Growing 2x Stock Gains)
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Historical Average: 80-100%
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Reasonable Valuation Range: 100-120%
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AI Bubble Belief: 54% of Investors
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Timestamps:
0:00 - The Buffett Indicator Just Hit 223%
1:30 - What It Actually Measures
3:15 - 1929 vs. 2000 vs. 2007 vs. 2026 Comparison
5:00 - Shiller CAPE Ratio at 40 (Second-Highest Ever)
6:45 - Margin Debt at Historic Extremes
8:20 - The Five-Stage Crash Cascade
10:00 - Earnings Disappointment Trigger
11:30 - Institutional Exit & Profit-Taking
13:00 - Index Rebalancing Collision
14:30 - Margin Calls & Forced Selling
16:00 - Complete Repricing & Panic Selling
17:45 - Q1 2026 Earnings as Trigger (4.5 Months)
19:15 - Investor Risk by Portfolio Type
21:00 - Historical Precedent Analysis
22:30 - The 18-Month Timeline
24:00 - Investment Strategy for 2026

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Research Sources: Warren Buffett Indicator Model, Shiller CAPE Ratio (Yale University), Federal Reserve Margin Debt Statistics, Historical Market Data (1929, 2000, 2007, 2008), Goldman Sachs Market Analysis, JPMorgan Asset Management, CNBC Financial Data
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