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In fact unless I'm missing something the units don't match up: Total stock market value has units $ GDP has units $/year So expressing their ratio as a %
by Ended 9y ago
In fact unless I'm missing something the units don't match up:
Total stock market value has units $
GDP has units $/year
So expressing their ratio as a % is misleading.
- AnimalMuppet 9y agoThe ratio has units of years - how many years of GDP does the value of the stock market represent? How long will it take the economy to produce the value assumed by the stock market valuations? Sure, that's not a pure number, but it's also not a totally nonsense number. At a minimum, it can be compared to historical values of the same number.
- rb808 9y agoA good similar example would be speed as a % of distance. Eg going on a trip 240 miles at 60 miles/hour is 0.25. Same thing.