Money and Finance
- Links
60 Minutes: Segments with President Obama and Jack Ma (LINK) Michael Lewis thinks the secret recordings of conversations between the Fed and Goldman are a big deal (LINK) Jason Zweig: Should Investors Chase After Bill Gross Again? (LINK) Cook & Bynum...
- Hussman Weekly Market Comment: This Time Is Different, Yet With The Same Ending
Link to: This Time is Different, Yet with the Same EndingThe Federal Reserve’s policy of quantitative easing has produced a historically prolonged period of speculative yield-seeking by investors starved for safe return. The problem with simply...
- Hussman Weekly Market Comment: Lopsided Risks
In mid-September, our estimates of prospective market return/risk dropped to the lowest figure we’ve observed in a century of market history (see Low Water Mark). That week turned out to be the high of the recent bull market, though it’s certainly...
- Hussman Weekly Market Comment: The Third Law Of Randomness
On March 5th, our estimates of prospective return/risk conditions in the stock market fell to the most negative 2.5% of all historical observations (see Warning - A New Who's Who of Awful Times to Invest). On March 26th, those estimates fell to the...
- Hussman Weekly Market Comment: Hard-negative
With the exception of extreme market conditions (see Warning- Examine All Risk Exposures , and Extreme Conditions and Typical Outcomes ), I try not to wave my arms around about near-term market risks, but I think it's important to cut straight to...
Money and Finance
Hussman Weekly Market Comment: Low-Water Mark
As of Friday, our estimates of prospective return/risk for the S&P 500 have dropped to the single lowest point we’ve observed in a century of data. There is no way to view this as something other than a warning, but it’s also a warning that I don’t want to overstate. This is an extreme data point, but there has been no abrupt change; no sudden event; no major catalyst. We are no more defensive today than we were a week ago, because conditions have been in the most negative 0.5% of the data for months. This is just the most negative return/risk estimate we've seen. It is what it is.
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Despite the uniformity of negative signals we presently observe, I can’t say with certainty that this particular instance will produce negative market outcomes, or that we won’t find ourselves at odds with a speculative, richly valued, overbought, overbullish but still-advancing market. But even setting aside our particular methods, we have a very mature market advance, at a high Shiller P/E, atop nearly every upper Bollinger band (two standard deviations above the 20-period average at daily, weekly, and monthly resolutions), in an environment of lopsided bullishness. All of this should make bells go off for anyone familiar with market history. Of all the investment adages that are being embraced as reasons to accept market risk, somehow the phrase “buy low, sell high” is conspicuously absent. I expect that this will prove to be a crucial error for investors. In all of the present ebullience about quantitative easing with no ex-ante amount (which I’ll again point out is far different than “unlimited” QE), the market conditions we observe at present have been consistently associated with negative outcomes throughout history.
- Links
60 Minutes: Segments with President Obama and Jack Ma (LINK) Michael Lewis thinks the secret recordings of conversations between the Fed and Goldman are a big deal (LINK) Jason Zweig: Should Investors Chase After Bill Gross Again? (LINK) Cook & Bynum...
- Hussman Weekly Market Comment: This Time Is Different, Yet With The Same Ending
Link to: This Time is Different, Yet with the Same EndingThe Federal Reserve’s policy of quantitative easing has produced a historically prolonged period of speculative yield-seeking by investors starved for safe return. The problem with simply...
- Hussman Weekly Market Comment: Lopsided Risks
In mid-September, our estimates of prospective market return/risk dropped to the lowest figure we’ve observed in a century of market history (see Low Water Mark). That week turned out to be the high of the recent bull market, though it’s certainly...
- Hussman Weekly Market Comment: The Third Law Of Randomness
On March 5th, our estimates of prospective return/risk conditions in the stock market fell to the most negative 2.5% of all historical observations (see Warning - A New Who's Who of Awful Times to Invest). On March 26th, those estimates fell to the...
- Hussman Weekly Market Comment: Hard-negative
With the exception of extreme market conditions (see Warning- Examine All Risk Exposures , and Extreme Conditions and Typical Outcomes ), I try not to wave my arms around about near-term market risks, but I think it's important to cut straight to...