Overview

• The gauge sits near 217% this week, its highest since 2021 and far above the dot-com peak of roughly 150%.
• Warren Buffett has cautioned that readings at 200% mean investors are "playing with fire," underscoring elevated risk.
• Market gains are heavily concentrated, with NVIDIA, Microsoft, and Apple together outweighing the smallest 200 companies combined.
• Other barometers are stretched as well, with the Shiller CAPE at its third-highest level, most Bank of America metrics elevated, and Jerome Powell calling markets "fairly highly valued."
• Strategists recommend diversifying into international stocks, core fixed income, and alternatives as U.S. growth cools, with first-half 2025 GDP around 1.75%.