Once again, S&P gained last week, causing John Hussman to provide the following comparison:
Inversely, based on his standard methodology, he presently estimates that the S&P 500 is priced to achieve an average total return over the coming decade of just 3.15% annually.
Read the full text of Hussman Weekly Market Commentary.
Last week, the S&P 500 Index ascended to a Shiller P/E in excess of 24 (this "cyclically-adjusted P/E" or CAPE represents the ratio of the S&P 500 to 10-year average earnings, adjusted for inflation). Prior to the mid-1990's market bubble, a multiple in excess of 24 for the CAPE was briefly seen only once, between August and early-October 1929. Of course, we observed richer multiples at the heights of the late-1990's bubble, when investors got ahead of themselves in response to the introduction of transformative technologies such as the internet. After a market slide of more than 50%, investors again pushed the Shiller multiple beyond 24 during the housing bubble and cash-out financing free-for-all that ended in the recent mortgage collapse.And a picture speaks for a thousand words:
Inversely, based on his standard methodology, he presently estimates that the S&P 500 is priced to achieve an average total return over the coming decade of just 3.15% annually.
Read the full text of Hussman Weekly Market Commentary.
