According to John Hussman's latest market commentary the S&P 500 is now more overvalued than at any point in history.

https://www.hussmanfunds.com/category/comment/

Hussman has found that the best metric for forecasting future returns of the S&P is market cap/gross value added, which is slightly different than market cap/GDP, and that the most predictable time frame is the next 12 years. His forecast for the next 12 years is an annualized return of -6%. If true, that would reduce the value of the S&P by 52% over the next 12 years.

According to my analysis the best metric for forecasting Berkshire's future return is P/B, by which metric Berkshire Hathaway is presently fairly valued. If Berkshire can continue to grow BVPS by 10%, then one would expect a return for Berkshire of 10%. However Berkshire's return also depends on the return of the S&P. Perhaps, with the S&P so extremely overvalued, using a multivariate analysis with two metrics for Berkshire, P/B and S&P market cap/gross value added, would give a better forecast for Berkshire Hathaway than P/B alone.

Berkshire Hathaway FAQ

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