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 ...
"For the uninitiated, Hussman has repeatedly made headlines by predicting a stock-market decline exceeding 60% and forecasting a full decade of negative equity returns. And as the stock market has continued to grind mostly higher, he's persisted with his calls, undeterred.
If Trump is elected, the stock markets will collapse!!
I have ten bucks tied up in Powerball futures. I hope I don’t lose it all.
These liberals WANT THE MARKET TO COLLAPSE...cheering our destruction. Piss off, eh!
Before the Great Recession, stock returns were on average ten per cent a year, bonds five percent. With interest rates so low, I don’t see bonds making a decent return for the next five years. Stocks, thanks to Trump’s policies but facing the headwind of a Dem Congress, should deliver twelve percent for the same period.
Theres always a crew of kranks offering a story like this at any given time. Always.
Sometimes insightful, but antisemitic taint
What happens if the masses revolt and Americans refuse to live like illegal aliens in their own country?
Then open border investors get worried!
It seems as if there is a coordinated attempt to “talk down” the economy by sowing scare stories throughout the media.
If the so-called investment guru didn’t correctly predict the Trump surge, I won’t listen to them.
Here is Hussman’s original column. It’s dense with facts and figures. Maybe somebody smarter than me can figure out what kind of portfolio he’s suggesting to avoid this apocalypse.
https://www.hussmanfunds.com/comment/mc181128/
Only in an exaggerated state due to the recent bull market.
Debt to income ratios. Over-priced real estate. Sovereign debt. Crazy derivatives. Lack of savings. Consumer over-extension. Relatively slow growth. Irrational exuberance.
But I won't.
As if this guy knows half of what, of market consequence, will happen in the next 12 years.
I can’t determine if he is liberal or not. But he did have this to say about the Trump tax cuts.
“The current tax legislation isn’t some thoughtful reform to benefit Americans,” he said in his December monthly note. “It’s a quickly planned looting through a broken window in our nation’s character.”
Probably not. He did, however, predict the dot.com bust and the 2008 recession.
Well, hopefully climate change will take out most of us first. We’re doomed no matter what happens. With Trump wanting a wall built, it is now looking as though Mexicans aren’t going to be the majority in the U.S by 2035 as it has been being predicted and celebrated on the boob tube for the past 20 years by the white psychomedia kiddies.
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.
He has probably made zero since the bottom of the markets in 2009 because the market has ALWAYS been grossly over priced, overvalued, overbought.
In the decade or so since I first heard of him, he’s never been bullish for one second. You can go look at anything he has written over the past decade. He is not gloomy bearish, he’s just “you’ll make nothing if you buy here because it’s badly overpriced and one day the universe will wake up and ascribe the correct value to all these things”.
The leftist Business Insider is doing its best to help tank the economy.
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