FTSE shares: is the Warren Buffett market indicator flashing caution?

first_img I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Image source: Getty Images I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Enter Your Email Address Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Simply click below to discover how you can take advantage of this. The FTSE 100 index finished April with a strong monthly gain on hopes of a post-coronavirus V-shaped recovery. Yet it slumped deep into the red on 1 May. London’s top benchmark dived 2.3% on Friday after having recorded around an 8% rally last month. As I write, I see that Monday may also be a down day.And the falls may not yet be over if Warren Buffett’s favourite market indicator holds true in the rest of the year. But despite a potential decline in May, Mr Buffett himself has just told investors to be invested in the markets for the long run. And I agree.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Are markets getting expensive?Analysts worldwide constantly work out whether stocks are cheap or expensive. Given the recent run-up in the markets, many investors are wondering whether they should be concerned about how markets could behave in the coming months.Here’s where the ‘Buffett Indicator’ may come in. According to Mr Buffett, the undisputed master of value investing, it may be the “best single measure of where valuations stand at any given moment“.This share market predictor now signals that broader markets are somewhat expensive. At the end of April, it hit a record high, according to various reports. Put another way, the overall confidence of market participants may be out of step with the broader economy. Let me first highlight that the Buffet Indicator takes the total market capitalisation (market cap) of US stocks and divides it by the quarterly gross domestic product (GDP) of the US. Thus it measures US equities and not the FTSE 100. So the US market cap-to-GDP ratio currently indicates caution. But if Wall Street falls hard, then the FTSE 100 can also be affected.Have you watched Buffett’s meeting online?On 2 May, Buffett spoke at his firm Berkshire Hathaway‘s annual meeting that was available to watch for global investors online. There were two main takeaways for me. The first is that the ‘Oracle of Omaha” isn’t buying US stocks yet. He said that he didn’t yet find value in any major acquisitions amid the pandemic decline in shares.His inaction could also potentially confirm the US market warning we’re getting from the Buffett Indicator.Is he right about the markets at this point? Predicting what indices and shares globally or in the UK may do in the coming months is anyone’s guess. However, if we were to get further worrying health or economic news, then investors may indeed be tempted to sell the markets soon and ask questions later.Yet history tells us that markets tend to recover from losses, only to make new highs. And timing the market in the short run is difficult, especially for the average investor.During the meeting, Buffett also underlined his firm belief that investors who buy stocks for the long run now will be amply rewarded. His emphasis was on disciplined, long-term investing over decades. And that was my second takeaway for the day.Foolish takeawayAnalysts use different measures to estimate whether broader markets are undervalued or overvalued. And the Buffett Indicator is only one of them.There are several FTSE 100 companies I’d consider buying for the long run, especially if there is any further weakness in their share prices. They include AstraZeneca, BT Group, British American Tobacco, Diageo, LLoyds, Ocado, and Smith & Nephew.center_img tezcang has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Berkshire Hathaway (B shares). The Motley Fool UK has recommended Diageo and Lloyds Banking Group and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short June 2020 $205 calls on Berkshire Hathaway (B shares). Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Our 6 ‘Best Buys Now’ Shares FTSE shares: is the Warren Buffett market indicator flashing caution? 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