Markets are not in a comfortable place right now. The S&P 500 was down by more than a percentage at yesterday’s close, the Dow Jones by near the same, and the Nasdaq was down nearly 2%. The VIX volatility index, by contrast, is up more than 9%—suggesting the turbulence is far from over.

Even then, Apollo’s chief economist, Torsten Sløk, wrote this week the S&P is at “historically extreme valuations.” In a note to clients yesterday, Sløk charted the “Warren Buffett indicator” (U.S. stock market cap to GDP) against the Shiller cyclically adjusted price-to-earnings ratio.

The result is—perhaps unsurprisingly—that over time the Buffett indicator has increased toward the exteme end, as has price-to-earnings. However, 2025 stands out as a particularly extended outlier.

The latest data und

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