seen from Germany
seen from United Kingdom
seen from T1
seen from China
seen from Moldova
seen from United Kingdom
seen from T1
seen from United Kingdom
seen from United States
seen from Germany
seen from T1
seen from South Korea
seen from Türkiye
seen from Germany
seen from Netherlands
seen from France
seen from Germany
seen from United States
seen from China
seen from Australia
Market Extremes... Michael Douville
Market Extremes… Michael Douville
Esther 1:13 Then the king said to the wise men who knew the times (for this was the king’s procedure toward all who were versed in law and judgment…)
Risk has entered the market place. Metrics from John Hussman indicate the market may be heading for a wild ride. Metrics from Hussman’s work indicate the same levels of risk from the Dot Com Bubble and the late 1920’s. Rumors of trade wars and…
View On WordPress
Weekend Reading: Lack Of Perspective
Weekend Reading: Lack Of Perspective
Weekend Reading: Lack Of Perspective by Lance Roberts In this past weekend’s missive I wrote:
“Speaking of low volatility, the market has now gone 108-trading days without a drop of 1% for both the Dow and the S&P 500. This is the longest stretch since September of 1993 for the Dow and December of 1995 for the S&P 500. The issue becomes, of course, which way the market breaks when volatility…
View On WordPress
HUSSMAN: I Think The Stock Market Is Crashing
Fund supervisor John Hussman of the Hussman Finances has been among the most vocal bear upon Wall surface Street for the previous few years.
The market has remained to increase highly in the face of these cautions, which has actually clobbered Hussman's track record and performance. Those who are loud as well as early/wrong on Wall surface Street are always ridiculed ... unless/until the trend adjustments. At that point, they become one of the declared few which were '.'
For the previous 6 months approximately, Hussman has actually been improving the volume of his warnings concerning a possible market crash.
In today's note, Hussman shares his sight that the marketplace's sharp rally over the previous 7 trading days is not likely the resumption of a rocketship bull market that started in 2009, yet a standard bear-market rally.
Specifically, Hussman believes that the market surrendered a month earlier and also is now in the process of crashing.
Hussman properly notes exactly what numerous financiers neglect, which is that market crashes don't occur in straight lines down. Rather, they usually include sharp plunges followed by sharp rallies followed by deeper dives complied with by rallies ...
Only after numerous of these roller-coaster steps, Hussman observes, does the market inevitably struck bottom.
In support of this position, Hussman provides graphes of five previous market accidents and also then among the marketplace today.
Note the saw-tooth patterns:
1929:
1973:
1987:
2000:
2007:
2014:
Unlike many other market forecasters, Hussman is always cautious to say that he does not understand what the market is visiting do. His evaluation, which is far much more strenuous than that of several who express more particular sights, leads him to end the following:
As I kept in mind last week, "Keep in thoughts that also extremely hostile market settings do not solve right into continuous declines. Even the 1929 as well as 1987 accidents started with initial losses of 10-12 % that were after that stressed by difficult developments that recuperated with regards to half of those losses before failing once more. The period surrounding the 2000 bubble top included a collection of 10 % decreases and recuperations. The 2007 top started with a plunge as market internals deteriorated materially (view Market Internals Go Unfavorable) complied with by a recovery to a limited new high in October that fell short to bring back those internals. One likewise has a tendency to understand increasing everyday volatility, and also a tendency for huge actions to occur in series."
My impression is that we are noting a comparable dynamic today. We stay open to the possibility for market internals to enhance convincingly enough to at least defer our instant problems regarding market danger, we need to also be cautious of the series usual to the 1929, 1972, 1987, 2000 as well as 2007 episodes: 1) a harsh disorder of miscalculated, overbought, overbullish conditions (rich assessments, uneven bullish belief, uncorrected and overextended short-term action), 2) a subtle failure in market internals throughout a wide range of stocks, markets, as well as safety and security types, 3) an initial "air-pocket" type selloff to an oversold short-term reduced, 4) a "fast, furious, prone-to-failure" brief squeeze to clear the oversold problem, 5) a continued pairing of abundant valuations as well as dispersion in market internals, resulting in a continuation to a crash or a prolonged bear market decline.
You can check out Hussman's complete note right here >
A new article has been published on www.brianbrown.net
New Post has been published on http://www.brianbrown.net/2014/10/27/hussman-i-think-the-stock-market-is-crashing/
HUSSMAN: I Think The Stock Market Is Crashing
John Hussman, Hussman FundsStart of a crash? See Also
Fund manager John Hussman of the Hussman Funds has been one of the most vocal bears on Wall Street for the past few years. The market has continued to rise strongly in the face of these warnings, which has clobbered Hussman’s reputation and performance. But those who are loud and early/wrong on Wall Street are always ridiculed…unless/until the trend changes. At that point, they become one of the heralded few who were “right.” For the last 6 months or so, Hussman has been increasing the volume of his warnings about a potential market crash. In this week’s note, Hussman shares his view that the market’s sharp rally over the past 7 trading days is not likely the resumption of a rocketship bull market that began in 2009, but a standard bear-market rally. Specifically, Hussman believes that the market rolled over a month ago and is now in the process of crashing. Hussman correctly observes what many investors forget, which is that market crashes don’t happen in straight lines down. Rather, they generally consist of sharp plunges followed by sharp rallies followed by deeper plunges followed by rallies… Only after many of these roller-coaster moves, Hussman observes, does the market ultimately hit bottom. In support of this position, Hussman offers charts of 5 previous market crashes and then one of the market today. Note the saw-tooth patterns: 1929: John Hussman, Hussman Funds 1973: John Hussman, Hussman Funds 1987: John Hussman, Hussman Funds 2000: John Hussman, Hussman Funds 2007: John Hussman, Hussman Funds 2014: John Hussman, Hussman FundsStart of a crash? Unlike many other market forecasters, John Hussman is always careful to say that he doesn’t know what the market is going to do. But his analysis, which is far more rigorous that that of many who express more certain views, leads him to conclude the following: As I noted last week, “Keep in mind that even terribly hostile market environments do not resolve into uninterrupted declines. Even the 1929 and 1987 crashes began with initial losses of 10-12% that were then punctuated by hard advances that recovered about half of those losses before failing again. The period surrounding the 2000 bubble peak included a series of 10% declines and recoveries. The 2007 top began with a plunge as market internals deteriorated materially (see Market Internals Go Negative) followed by a recovery to a marginal new high in October that failed to restore those internals. One also tends to see increasing day-to-day volatility, and a tendency for large moves to occur in sequence.” My impression is that we are observing a similar dynamic at present. Though we remain open to the potential for market internals to improve convincingly enough to at least defer our immediate concerns about market risk, we should also be mindful of the sequence common to the 1929, 1972, 1987, 2000 and 2007 episodes: 1) an extreme syndrome of overvalued, overbought, overbullish conditions (rich valuations, lopsided bullish sentiment, uncorrected and overextended short-term action); 2) a subtle breakdown in market internals across a broad range of stocks, industries, and security types; 3) an initial “air-pocket” type selloff to an oversold short-term low; 4) a “fast, furious, prone-to-failure” short squeeze to clear the oversold condition; 5) a continued pairing of rich valuations and dispersion in market internals, resulting in a continuation to a crash or a prolonged bear market decline. You can read Hussman’s full note here SEE ALSO: People Don’t Like The Word “Crash,” So I Won’t Use It, But…
Link to this story:
Please share with your friends:
A new article has been published on www.brianbrown.net
New Post has been published on http://www.brianbrown.net/2014/10/07/people-who-predict-stock-market-crashes-in-bull-markets-always-look-like-idiots-until-the-market-crashes/
People Who Predict Stock-Market Crashes In Bull Markets Always Look Like Idiots... Until The Market Crashes
AP ImagesNew York Stock Exchange, October 1929
One inevitable feature of long bull markets is that, toward the end of them, anyone who prematurely voices caution will be viewed and treated as a fool.
Today’s case in point: John Hussman, the manager of the Hussman Funds.
Unlike most stock-market forecasters, Hussman has correctly (if modestly prematurely) predicted the last two crashes — the one that began in 2000 and the one that began in 2007.
One might think that record would buy him some credibility.
Alas, Hussman also made a cautious and therefore incorrect call in the depths of the market crash in 2009. This call caused him to miss the turn and then underperform badly for the five years up to today. And in an industry in which 90 days is a long time, 5 years is basically forever.
So Hussman is now widely considered an incompetent moron, and the highly detailed analyses that are now prompting him to sound ever-louder warnings about an impending crash are seen as the ravings of a bitter has-been who is too obstinate to realize that his valuation model is broken and the world has forever changed.
If the market doesn’t crash — if stocks keep rising for the next several years, and the SP 500 charges from ~2,000 all the way to ~3,000, as one august brokerage firm recently predicted it would — then Hussman will have earned some of the derision that is currently being directed his way.
If he proves correct, however, his reputation will be restored, and everyone will start saying he’s a genius again.
Such is the life of a stock forecaster.
One wise point that Hussman himself made this week, however, is that even those who successfully predict crashes rarely get the timing right — regardless of how history remembers them.
For example, everyone remembers the famous prediction the investor Roger Babson made on September 5th, 1929, on the eve of the Great Crash.
“Sooner or later a crash is coming,” Babson said. “And it may be terrific.”
Stocks tanked immediately, and, three years later, they bottomed nearly 80% below their peak.
With a prediction like that, it’s not surprising that history has lionized Babson’s forecast.
What has been forgotten, Hussman observes, is that Babson had been saying the same thing for years.
And during those years — the last, glorious years of the Great Bull Market of the 1920s — Babson looked like (and probably was considered) an idiot.
In his weekly note this week, which is as frightening as ever, Hussman includes a chart of a few of the times Babson made his crash prediction (yellow arrows). As you can see, he was “dead wrong” for several years.
John Hussman
For fun, Hussman also includes another assertion made at the peak of the 1920s bull market, one that has become even more emblazoned into market history. That assertion is the one made by the famous economist Irving Fisher, who observed, just after the first lurch of the crash, that “stock prices have reached what looks like a permanently high plateau.”
Oops.
The point is this:
Just because everyone is telling you John Hussman is an idiot and that you can therefore safely ignore not only his crash call but, more importantly, the careful logic that he is using to make it, doesn’t mean that you should listen to them.
Hussman may, of course, be wrong: The future is unknowable, and some market forecasters are, in fact, idiots.
But reputations and performance on Wall Street often have a way of mean-reverting just the way the markets often do. And Hussman’s reputation and performance has now reached such and extreme that he is long overdue for a bounce-back.
So don’t be surprised if Mr Hussman — Dr. Hussman, actually — is someday again considered smart.
SEE ALSO: People Don’t Like It When I Say Stocks Might “Crash,” So I Won’t Use That Word, But…
Link to this story:
Please share with your friends:
A noo artikle has dunben rote ahn WWW.GITERDONENEWS.COM
thar's a noo artikle ha dunben wrote uhn www.giterdonenews.com calt
People Who Predict Stock-Market Crashes In Bull Markets Always Look Like Idiots ... Until The Market Crashes
AP ImagesNew York Stock Exchange, Octob'r 1929. One inevitabull feeture o'long bull markets is at, toward t'end o'um, innyone who prematurelee voices caushun will be viewet an' treeted as a fool. Today’s case n' point: John Hussmun, t'manjer o't' Hussmun Funds. Unlack mos stock-market...
A noo artikle has dunben rote ahn WWW.GITERDONENEWS.COM
thar's a noo artikle ha dunben wrote uhn www.giterdonenews.com calt
People Who Predict Stock-Market Crashes In Bull Markets Always Look Like Idiots... Until The Market Crashes
AP ImagesNew York Stock Exchange, Octob'r 1929 One inevitabull feeture o'long bull markets is at, toward t'end o'um, innyone who prematurelee voices caushun will be viewet an' treeted as a fool. Today’s case n' point: John Hussmun, t'manjer o't' Hussmun Funds. Unlack mos stock-market...
HUSSMAN: I Would Be Remiss Not To Tell You That The Stock Market Will Probably Crash
Get the best Credit Tips at Credit Visionary
Fund supervisor John Hussman, who’s one of the most disciplined, well-informed, and fact-based financiers around, has actually struggled mightily in recent years.
Hussman’s evaluation models and technical indications have all been flashing yellow and red lights for years.
As an outcome, Hussman has actually placed his funds meticulously … and therefore missed out on a few of the treasure trove that’s actually powered stocks to amazing new highs.
As any financial investment professional will inform you, on Wall Street you’ve about 90 days to be ‘right.’
If you make a market call that breaks you for longer than 90 days, you are not considered ‘early’ or ‘prudent’ or ‘cautious.’ You are thought about ‘wrong.’
And, soon, if you stay with your firearms, individuals begin to concern you as a spiritual fanatic– too wedded to your incompetency and pride to confess your error and join the happy, comfortable, consensus herd. And afterwards people write you off as a ‘perma-____’ and stop hearing you.
Hussman’s care and underperformance over the last few years have actually harmed his credibility and triggered a great deal of people to stop listening to him.
And that’s too bad.
Because often huge market trends take a long time to play out.
And, sometimes, it’s just after a bold, persistent analyst has been dismissed as an out-of-touch charlatan that a market imbalance is lastly dealt with.
I’ll go out on a limb below and state that I think there’s a good chance that John Hussman will eventually be shown right.
Even if the marketplace doesn’t really crash, I think it’s highly likely that stock returns will be sub standard for the next 10 years.
Yes, as John Hussman will be the first to confess, there’s also a possibility that it’s different this time which his caution is unwarranted.
But it’s worth worrying that that’s the only means John Hussman won’t ultimately be proven right– if it’s ‘different this time.’
Because every historical indication Hussman is reviewing is recommending that the stock market is extremely overvalued and movinged towards a period of poor returns.
How lousy?
John Hussman thinks there’s a good chance the stock exchange will quickly crash 40 % -50 %.
A crash of that magnitude would take the DOW from 15,000 to 7,500-8,500.
And even if the market doesn’t crash Hussman thinks stocks are priced to produce returns of only a couple of percentage points annually over the next decade– far below the 7 % inflation-adjusted long-term return that everybody is made use of to and the double-digit returns of the last few years.
medianet_width='728'; medianet_height= '90'; medianet_crid='852914811';
If you want to feel comfortable and delighted, go ahead and ridicule John Hussman with everyone else.
If you want to prepare yourself for what seems like a most likely possible stock-market future, however, read on …
Frankly, I ask yourself whether any amount of arm-waving will incline investors to actually examine their danger exposures today, much less think about the prospect of a 40 %+ decrease in the S&P 500 Index that’d be needed just to bring stocks to historically run-of-the-mill valuations. But at a time when our price quotes of prospective threat are surging, I’d be remiss not to observe that truth.
At present, we’ve what could best be defined as a broken speculative peak, in that market internals (specifically interest-sensitive teams), breadth and leadership have actually broken down consistently following a severe miscalculated, overbought, overbullish syndrome. If you remember, the market also recuperated to new highs in October 2007, weeks after the preliminary, decisive break in market internals at that time. Presently, we are reviewing the exact same set of situations. On some occasion connected to tapering or the Fed Chair election, we might even see another push higher. It is not really merely short-term danger, but deep cyclical threat that’s of issue.
My major objective below is to motivate investors to look very carefully at their financial investment positions, before they lose the chance to alter them advantageously. As I kept in mind in the October 15, 2007 market comment Caution – Examine All Danger Exposures:
‘Whatever market exposure financiers accept today should be the same market exposure that financiers are committed to maintain for the duration of a bear market, without deserting their financial investment strategy. Investors without any plan to possess stocks through a market decline, holding them only in the hope of selling at market highs, might find in hindsight that these were them.’
In fact, they were. I get it. No one cares. This time is different. The Fed won’t permit – allow – stocks to go lower. There’s no concern that a few binary events – mainly the likely ‘tapering’ of quantitative easing, and the choice of a new Fed Chairman – develops considerable uncertainty about the short term. My issues are more prolonged, and are particularly associated with the possibility that the present market cycle will finish in a manner – as market cycles have historically – that erases more than half of the gains of the preceding booming market advance. My impression is that the losses even in a not-so-terrible conclusion of today cycle might come closer to three-quarters of those gains.
Keep reading here >
Now, even if take Hussman’s warnings seriously, it’s still difficult to identify exactly what you ought to do about it. Bonds and cash also appear like sub standard investments these days, and real-estate is not really precisely a shouting buy. So even if you conclude that there’s a good chance that stocks could drop 40 % -50 %, you might decide simply to ride the plunge out. But a minimum of you’ll have been prepared for it.
You’ve been warned!
Join the discussion about this story »
