This is because mammoth Federal spending will slow down, he said, and won't be there in addition to consumer spending. In the chart below is Hussman's primary indicator for valuation - the ratio of total market capitalization to gross value-added, or total profits - which he says "remains more strongly correlated with actual subsequent market returns than any other measure we've tested or introduced." It currently sits above its levels during the 20 bubbles.īut what might start a decline with the economy finally running again? One possibility is underwhelming economic data, Hussman said. With valuations where they're at, he argues with high conviction that the S&P 500 faces negative returns over the next decade-plus. At various points over the last year he's said he expects stocks to drop 65-70%.īut what he seems to be more concerned about is the longer-term return outlook for investors. A stock market crash is one thing to Hussman. "I expect that they will suffer for it, not only in the form of steep losses over the completion of the market cycle, but also in the form of a long, interesting trip to nowhere for nearly 20 years." ![]() "My impression is that after years of Fed-induced, yield-seeking speculation, investors have again concluded - at the worst possible time - that valuations simply don't matter," Hussman wrote in a July 14 commentary. Hussman famously called the 20 market bubbles. Now is one of those instances in the stock market, according to John Hussman, the president of the Hussman Investment Trust. It's a time-honored tradition in financial markets: every so often, investors collectively stop caring about how much they actually pay for assets. ![]() See more stories on Insider's business page.He also warned that investors aren't accounting for a reduction in government spending.Hussman also expects stock market returns to be negative over the next decade-plus.John Hussman is warning that stocks will see "steep losses" ahead.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |