Subject: Market valuation
Shiller PE peaks (followed by what happened next):

1929: 31x (-8.4%, -24.8%, -43.3%)

2000: 44x (-9.1%, -11.9%, -22.1%)

2025: 41x (TBC)

*Mag 7 (outside of Tesla) have been extremely profitable companies over the past 10 years and have enjoyed favourable corporate taxes. The open question now, is what will the returns be from the $500 billion AI investment.

Buffett indicator (Market cap/GDP):
2000: 126%
2025: 225% (with larger international earnings)

Market down years from 1929:
1929: –8.42%
1930: –24.90%
1931: –43.34%
1932: –8.19%
1934: –1.44%
1937: –35.03%
1940: –9.78%
1941: –11.59%
1946: –8.07%
1957: –10.78%
1962: –8.73%

1966: –10.06%
1969: –8.50%
1973: –14.66%
1974: –26.47%
1977: –7.18%
1981: –4.91%
2000: –9.10%
2001: –11.89%
2002: –22.10%
2008: –37.00%
2018: –4.38%
2022: –18.11%

Berkshire’s negative return years:
1966: -3.4%
1973: -2.5%
1974: -48.7%
1984: - 2.7%
1990: - 23.1%
1999: -19.9%
2002: -3.8%
2008: -31.8%
2011: -4.7%
2015: -12.5%

Berkshire can’t find anything material to buy and has plenty of cash as a result.

The future is certain. Markets will go up and down. Value matters.