”For our part, we ultimately adapted to deranged Fed policies by becoming content to gauge the presence or absence of speculative psychology – based on the uniformity or divergence of market internals – without assuming that either speculation or risk-aversion have reliable limits. So yes, this time was different, but in a very dangerous way. Faced with a zero-interest rate world that combined ‘fear of missing out’ with a belief that ‘there is no alternative’ to yield-seeking speculation, investors unwittingly drove the most reliable stock market valuation measures to levels beyond the 1929 and 2000 extremes. Unfortunately, those valuations also imply dismal long-term returns in any world not permanently dominated by FOMO and TINA psychology. Measured from the recent bubble peak, the likely consequence will be a long, interesting, 10-20 year trip to nowhere for the S&P 500. There’s also a strong possibility of an interim loss in the S&P 500 in the range of 50-70% over the completion of this market cycle, or as we observed between 2000-2009, a sequence of cyclical lows punctuated by several extended recoveries.”
– John P. Hussman, Ph.D., April 2022, Repricing a Market Priced for Zero
Ended today up a couple of grand as my stocks gains outpaced what I lost on the ETF I have to bet against the market.
I suspect Hussman will be down enuff to wipe that out.
CNBC regular Dan Ives cited by SEC for accounting irregularities, but that doesn’t stop him from today’s slobbering over technology stocks. And people listen to this guy?
CNBC regular Dan Ives cited by SEC for accounting irregularities, but that doesn’t stop him from today’s slobbering over technology stocks. And people listen to this guy?
”For our part, we ultimately adapted to deranged Fed policies by becoming content to gauge the presence or absence of speculative psychology – based on the uniformity or divergence of market internals – without assuming that either speculation or risk-aversion have reliable limits. So yes, this time was different, but in a very dangerous way. Faced with a zero-interest rate world that combined ‘fear of missing out’ with a belief that ‘there is no alternative’ to yield-seeking speculation, investors unwittingly drove the most reliable stock market valuation measures to levels beyond the 1929 and 2000 extremes. Unfortunately, those valuations also imply dismal long-term returns in any world not permanently dominated by FOMO and TINA psychology. Measured from the recent bubble peak, the likely consequence will be a long, interesting, 10-20 year trip to nowhere for the S&P 500. There’s also a strong possibility of an interim loss in the S&P 500 in the range of 50-70% over the completion of this market cycle, or as we observed between 2000-2009, a sequence of cyclical lows punctuated by several extended recoveries.”
– John P. Hussman, Ph.D., April 2022, Repricing a Market Priced for Zero
Valuation: The forward 12-month P/E ratio for the S&P 500 is 15.8. This P/E ratio is below the 5-year average (18.6) and below the 10-year average (17.0).
”For our part, we ultimately adapted to deranged Fed policies by becoming content to gauge the presence or absence of speculative psychology – based on the uniformity or divergence of market internals – without assuming that either speculation or risk-aversion have reliable limits. So yes, this time was different, but in a very dangerous way. Faced with a zero-interest rate world that combined ‘fear of missing out’ with a belief that ‘there is no alternative’ to yield-seeking speculation, investors unwittingly drove the most reliable stock market valuation measures to levels beyond the 1929 and 2000 extremes. Unfortunately, those valuations also imply dismal long-term returns in any world not permanently dominated by FOMO and TINA psychology. Measured from the recent bubble peak, the likely consequence will be a long, interesting, 10-20 year trip to nowhere for the S&P 500. There’s also a strong possibility of an interim loss in the S&P 500 in the range of 50-70% over the completion of this market cycle, or as we observed between 2000-2009, a sequence of cyclical lows punctuated by several extended recoveries.”
– John P. Hussman, Ph.D., April 2022, Repricing a Market Priced for Zero
Ended today up a couple of grand as my stocks gains outpaced what I lost on the ETF I have to bet against the market.
I suspect Hussman will be down enuff to wipe that out.
Hope to be wrong
Hussman down 0.86% today.
Worst day yet.
Wiped out nearly all my gains for the day.
My investment in this fund is down nearly 3.5% -- during a period where the market has been up and down, mostly down --
”For our part, we ultimately adapted to deranged Fed policies by becoming content to gauge the presence or absence of speculative psychology – based on the uniformity or divergence of market internals – without assuming that either speculation or risk-aversion have reliable limits. So yes, this time was different, but in a very dangerous way. Faced with a zero-interest rate world that combined ‘fear of missing out’ with a belief that ‘there is no alternative’ to yield-seeking speculation, investors unwittingly drove the most reliable stock market valuation measures to levels beyond the 1929 and 2000 extremes. Unfortunately, those valuations also imply dismal long-term returns in any world not permanently dominated by FOMO and TINA psychology. Measured from the recent bubble peak, the likely consequence will be a long, interesting, 10-20 year trip to nowhere for the S&P 500. There’s also a strong possibility of an interim loss in the S&P 500 in the range of 50-70% over the completion of this market cycle, or as we observed between 2000-2009, a sequence of cyclical lows punctuated by several extended recoveries.”
– John P. Hussman, Ph.D., April 2022, Repricing a Market Priced for Zero
Valuation: The forward 12-month P/E ratio for the S&P 500 is 15.8. This P/E ratio is below the 5-year average (18.6) and below the 10-year average (17.0).
”For our part, we ultimately adapted to deranged Fed policies by becoming content to gauge the presence or absence of speculative psychology – based on the uniformity or divergence of market internals – without assuming that either speculation or risk-aversion have reliable limits. So yes, this time was different, but in a very dangerous way. Faced with a zero-interest rate world that combined ‘fear of missing out’ with a belief that ‘there is no alternative’ to yield-seeking speculation, investors unwittingly drove the most reliable stock market valuation measures to levels beyond the 1929 and 2000 extremes. Unfortunately, those valuations also imply dismal long-term returns in any world not permanently dominated by FOMO and TINA psychology. Measured from the recent bubble peak, the likely consequence will be a long, interesting, 10-20 year trip to nowhere for the S&P 500. There’s also a strong possibility of an interim loss in the S&P 500 in the range of 50-70% over the completion of this market cycle, or as we observed between 2000-2009, a sequence of cyclical lows punctuated by several extended recoveries.”
– John P. Hussman, Ph.D., April 2022, Repricing a Market Priced for Zero
Valuation: The forward 12-month P/E ratio for the S&P 500 is 15.8. This P/E ratio is below the 5-year average (18.6) and below the 10-year average (17.0).
Have you considered hiring Flagpole as your bookkeeper? That 3.5% loss will turn into a 7% gain in no time!
I think the game (for tax purposes) is to show gains as losses
When you hear people talk about a "buying opportunity" here, keep in mind that the "opportunity" requires valuations to restore the most extreme levels in history. Allow for fast, furious clearing rallies, but with internals still ragged, oversold conditions aren't "limits." https://t.co/L7VaB2yRcwpic.twitter.com/wAp4vbXKsj
I tend to think this may be a signal that the worst is priced into the current level and it may be safe to start dipping one's toes into the water, albeit gradually.
I suspect not.
I see disaster ahead.
We will see.
What would cause the disaster?
Something I thought of, school loan repayments are set to kick back in right at a time when people are struggling with inflation and saving very little money already. This could be a pretty bad thing for anyone who has student loans. Credit card debt is also much higher than it has been.
Since the day this thread was created, the Dow Jones has risen about 8.67% per year (CAGR to account for compounding) S&P 500 went from 1656.78 to 3863.16, a CAGR of almost exactly 10% per year.
CNBC regular Dan Ives cited by SEC for accounting irregularities, but that doesn’t stop him from today’s slobbering over technology stocks. And people listen to this guy?