what is the stock market capitalization to gdp ratio 
the stock market capitalization to gdp ratio is a ratio used to determine whether an overall market is undervalued or overvalued compared to a historical average the ratio can be used to focus on specific markets such as the u s market or it can be applied to the global market depending on what values are used in the calculation it is calculated by dividing the stock market cap by gross domestic product gdp the stock market capitalization to gdp ratio is also known as the buffett indicator after investor warren buffett who popularized its use formula and calculation of the stock market capitalization to gdp ratiomarket capitalization to gdp smcgdp 100where smc stock market capitalizationgdp gross domestic product begin aligned text market capitalization to gdp frac text smc text gdp times 100 textbf where text smc text stock market capitalization text gdp text gross domestic product end aligned market capitalization to gdp gdpsmc 100where smc stock market capitalizationgdp gross domestic product 