From a friend in the business:

    The ratio of stock market value to U.S. GDP has fallen to 78%. This is based on the latest estimate for GDP at $14.3 trillion and U.S. market cap of about $11.2 trillion. The reason this number is significant is from a 2002 article that Warren Buffet wrote for Fortune Magazine (2002 Investor Guide). In the article Buffet talked about how the lofty valuations that were still evident from the 2000 stock market peak would limit forward returns. At the time, the ratio stood at 120% and was down from 174% at the peak. His quote, “If the ratio falls to 70 -80% area, buying stocks is likely to work very well for you”. The ratio never did get to his range at the bear market bottom in 2002, but we are there now.