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Investors Are Staring At The Bleakest Future Since The Great Depression....(John Hussman)
Business Insider ^ | 12-2-2018

Posted on 12/02/2018 12:13:44 PM PST by blam

* John Hussman — the outspoken investor and former professor who's been predicting a stock crash — says traditionally diversified portfolios are set to offer their worst returns since the Great Depression over the next 12 years.

* Hussman explains why he sees a US stock market drop of more than 60% coming, and breaks down why the Federal Reserve's past actions have created the situation.

There's never been a worse time to be a conventional portfolio manager.

Well, maybe back in the deepest, darkest throes of the Great Depression that crushed the US economy way back in 1929. But not for the past 90-or-so years.

At least that's what John Hussman thinks. The former economics professor and current president of the Hussman Investment Trust has crunched the numbers and found that the future looks historically bleak for investors who aim for a traditionally diversified mix of holdings.

His methodology looks at a portfolio with 60% invested in the S&P 500, 30% in Treasury bonds, and 10% in Treasury bills — and it's designed to assess the expected total return over a forward 12-year horizon.

Hussman finds that at the stock market's all-time peak in September, this mix of investments was set to produce total returns of just 0.48% over that 12-year period. As you can see below — as signified by the blue line — that's the lowest since the Great Depression era of 1929.

Even though bond yields recently climbed and US stocks took a 10% hit, Hussman notes that the expected return climbed to just 1.29%, still Great Depression lows. This fact shows just how far stretched the market is right now —

(snip)

(Excerpt) Read more at businessinsider.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: depression; doom; economy; hussman; johnhussman; markets; reversiontomean; reversiontothemean; stockmarket
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To: blam

> this mix of investments was set to produce total returns of just 0.48% over that 12-year period <

Not 0.47% or 0.49%, but 0.48%. And over 12 years. I am always suspicious of predictions like that.


41 posted on 12/02/2018 1:32:44 PM PST by Leaning Right (I have already previewed or do not wish to preview this composition.)
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To: blam

IIRC correctly Hussman has predicted TEOTWAWKI 20 times in the last twenty years. He was - sort of - right twice. 2000 and 2008 sucked.


42 posted on 12/02/2018 1:36:24 PM PST by narses (Censeo praedatorium gregem esse delendum.)
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To: blam

John Hussman is a hedge fund guy. As an example the return of his Strategic Growth Fund HSGFX over 10 years is -5.41% annualized. The fund has a 1.37% expense ratio!

The S&P 10 year return is 275% (14.17% annualized).

The guy is a LOSER.

Having said that — no one can predict the market and crashes occur. Best bet is to invest in a diversified portfolio over decades, e.g. low expense index funds like Vanguard, and leave it alone.


43 posted on 12/02/2018 1:46:54 PM PST by plain talk
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To: blam

Amazing how Trump’s presence in the White House triggers doomsday scenarios in the minds of many.

It’s what they want to happen. Not what will happen.

By preaching it, they hope to make people get out of the market and thus make the index go down. The self-fullfilling prophecy.


44 posted on 12/02/2018 1:58:59 PM PST by I want the USA back (There are two sexes: male (pronoun HE), and female (pronoun SHE). Denial of this is insanity.)
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To: JayGalt
People that stayed in didn’t lose. Being diversified and not panicking are winning strategies.

Absolutely. I have friends that implored me to sell when the market went down (repeatedly over 4 decades). I stayed in, they sold. And they lost money from selling on the way down and missing out on the market when it recovered and kept going up.

Don't panic!

45 posted on 12/02/2018 2:45:01 PM PST by roadcat
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To: blam

BS article using a horrible portfolio that would not produce decent results.

There are much better options.

Wells Fargo does nicely for me.

Two years retired and still haven’t touched the main nut yet!


46 posted on 12/02/2018 2:54:13 PM PST by GRRRRR (Make America Greater Than Ever Before!)
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To: blam

He’ll be out there telling how he predicted it, if it ever happens. Thirty years from how, he’ll forget to mention he had been predicting in non-stop for 50 years.


47 posted on 12/02/2018 2:55:54 PM PST by DoughtyOne (01/26/18 DJIA 30 stocks $26,616.71 48.794% > open 11/07/16 $215.71 frm 50% increase in 1.2183 yrs)
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To: blam

Sooner or later he may be half right. Amazing that so many of these perm-bears advisers have any clients.


48 posted on 12/02/2018 3:52:34 PM PST by aquila48
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To: Attention Surplus Disorder
On one hand, Hussman is completely brilliant. With his prose. His assessments of markets is of negative value, however. He is and has been 100% wrong. Not 99%. He’s even more wrong than Dennis Gartman.

Value investors cannot understand today's markets, which are All Momentum, All The Time. Under any traditional, honest method of valuing equity assets, the markets are quite insane. But betting that way is the fastest way to lose money. If one believes market prices are at immoral levels because price discovery is completely broken, the better course is to simply find alternative ways to invest your capital.

49 posted on 12/02/2018 3:57:29 PM PST by Mr. Jeeves ([CTRL]-[GALT]-[DELETE])
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To: shelterguy
I have ten bucks tied up in Powerball futures. I hope I don’t lose it all.

Funniest line of the day !!

50 posted on 12/02/2018 4:02:08 PM PST by JesusIsLord
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To: CaptainK

Invest ALL your money with Hussman? He has ALL the answers.


51 posted on 12/02/2018 4:23:55 PM PST by Sequoyah101 (It feels like we have exchaged our dreams for survival. We just ha va few days that don't suck.)
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To: blam; Gamecock; SaveFerris; PROCON
He should stick to playing a grouchy law professor. He doesn't know beans about money.


52 posted on 12/02/2018 4:26:49 PM PST by Larry Lucido
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To: blam

Business Insider

Partner with Yahoo


53 posted on 12/02/2018 4:33:03 PM PST by SaveFerris (Luke 17:28 ... as it was in the days of Lot; they did eat, they drank, they bought, they sold ......)
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To: House Atreides

[The leftist Business Insider is doing its best to help tank the economy.]

Yes, that’s why they’re partners with Huff Po Light Yahoo.


54 posted on 12/02/2018 4:35:02 PM PST by SaveFerris (Luke 17:28 ... as it was in the days of Lot; they did eat, they drank, they bought, they sold ......)
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To: blam
dow futures up +431

s&p futures up +43.00

nasdaq futures up +131

gonna be a YUGE up day tomorrow

I'd say the current correction is over ... new highs by Christmas ... then off to the races.

55 posted on 12/02/2018 4:46:11 PM PST by bankwalker (Immigration without assimilation is an invasion.)
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To: House Atreides

My inve rents doing good. Bought a bunch of cheap houses for cash returns way North of 15%.


56 posted on 12/02/2018 5:51:04 PM PST by genghis
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To: House Atreides

My inve rents doing good. Bought a bunch of cheap houses for cash returns way North of 15%.


57 posted on 12/02/2018 5:51:04 PM PST by genghis
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To: blam

If profits are good; the market will be good. Foreign money poring in will be the added bonus.


58 posted on 12/02/2018 7:32:40 PM PST by Revolutionary ("Praise the Lord and Pass the Ammunition!")
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To: blam

Did he say this before or after the recent 500+ bump?


59 posted on 12/03/2018 2:35:41 AM PST by trebb (Those who don't donate anything tend to be empty gasbags...no-value-added types)
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To: blam
Hussman finds that at the stock market's all-time peak in September, this mix of investments was set to produce total returns of just 0.48% over that 12-year period. As you can see below — as signified by the blue line — that's the lowest since the Great Depression era of 1929.

Even though bond yields recently climbed and US stocks took a 10% hit, Hussman notes that the expected return climbed to just 1.29%, still Great Depression lows. This fact shows just how far stretched the market is right now —


60 posted on 12/03/2018 2:38:55 AM PST by Tolerance Sucks Rocks ( The US Constitution ....... Invented by geniuses and God .... Administered by morons ......)
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