Money and Finance
Link to: The Journeys of Sisyphus
- Links
The “Enemies” of Warren Buffett [H/T @Sanjay__Bakshi] (LINK) Two Mental Models (and 24 Things): Network Effects and Critical Mass - by Tren Griffin (LINK) Utility Investor With Ties to Buffett Joins World's 400 Richest [H/T Linc] (LINK)...
- Links
Daniel Kahneman: ‘What would I eliminate if I had a magic wand? Overconfidence’ (LINK) Related book: Thinking, Fast and SlowChris Pavese's idea presentation on SeaWorld Entertainment (video) (LINK) Related book: Walt's Revolution!:...
- Hussman Weekly Market Comment: Ockham's Razor And The Market Cycle
Link to: Ockham's Razor and the Market Cycle We increasingly see investors believing that history is no longer informative, and that the Federal Reserve has finally discovered how to produce perpetually rising markets and can intervene without...
- Hussman Weekly Market Comment: Market Peaks Are A Process
Link to: Market Peaks are a ProcessIt’s fascinating how investors come to forget that markets move in cycles and not perpetual diagonal lines. As value investor Howard Marks wrote in The Most Important Thing, "Rule number one: most things will prove...
- Hussman Weekly Market Comment: The Siren's Song Of The Unfinished Half-cycle
Given the extent and maturity of the recent advance, it’s very odd that analysts are now beginning to toss around the idea that stocks have entered a secular bull market. These notions are based not on the level of valuation, nor on the duration of...
Money and Finance
Hussman Weekly Market Comment: The Journeys of Sisyphus
Link to: The Journeys of Sisyphus
As we discussed several months ago, that hope of succeeding rests on what economist J.K. Galbraith called “the extreme brevity of the financial memory.” Part of that brevity rests on ignoring the forest for the trees, and failing to consider movements further up the mountain in the context of how far the stone typically falls once it gets loose. It bears repeating that the average, run-of-the-mill bear market decline wipes out more than half of the preceding bull market advance, making the April 2010 S&P 500 level in the 1200’s a fairly pedestrian expectation for the index over the completion of the current market cycle. A decline of that extent wouldn’t bring valuations close to historical norms, and certainly not to levels that would historically represent “undervaluation.” But consider that a baseline expectation, and don’t be particularly surprised if the market loses closer to 38% - which is the average cyclical bear market loss during a secular bear market period. A market loss of about 50% would put historically reliable valuation metrics at their historical norms, though short-term rates near zero would seem inconsistent with a move to historically normal valuations with typical (~10% annual) expected total returns, absent other disruptions.
- Links
The “Enemies” of Warren Buffett [H/T @Sanjay__Bakshi] (LINK) Two Mental Models (and 24 Things): Network Effects and Critical Mass - by Tren Griffin (LINK) Utility Investor With Ties to Buffett Joins World's 400 Richest [H/T Linc] (LINK)...
- Links
Daniel Kahneman: ‘What would I eliminate if I had a magic wand? Overconfidence’ (LINK) Related book: Thinking, Fast and SlowChris Pavese's idea presentation on SeaWorld Entertainment (video) (LINK) Related book: Walt's Revolution!:...
- Hussman Weekly Market Comment: Ockham's Razor And The Market Cycle
Link to: Ockham's Razor and the Market Cycle We increasingly see investors believing that history is no longer informative, and that the Federal Reserve has finally discovered how to produce perpetually rising markets and can intervene without...
- Hussman Weekly Market Comment: Market Peaks Are A Process
Link to: Market Peaks are a ProcessIt’s fascinating how investors come to forget that markets move in cycles and not perpetual diagonal lines. As value investor Howard Marks wrote in The Most Important Thing, "Rule number one: most things will prove...
- Hussman Weekly Market Comment: The Siren's Song Of The Unfinished Half-cycle
Given the extent and maturity of the recent advance, it’s very odd that analysts are now beginning to toss around the idea that stocks have entered a secular bull market. These notions are based not on the level of valuation, nor on the duration of...