This week’s John Hussman worth reading as it addresses a number of key issues facing us. As usual, he talks about the market valuation levels and market internals (technical). He also discusses the likelihood of not so-hyper long term inflation and the appropriate investment strategy facing it. Here are my notes:
1. As of last week, the Market Climate for stocks remained characterized by modestly unfavorable valuations and mixed market action, therefore Hussman Growth Fund is fully hedged.
2. Long-term outlook for S&P500 is that it will deliver a 7.8% annual return over the coming decade.
3. Short-term, market is not longer overbought, nor it is oversold.
4. Thursday's employment report was better than John Hussman expected at the beginning of the year.
5. But the market’s second quarter advance requires a favorable economic development, not just a “less bad” situation.
6. Price-volume action suggests increasing impatience among investors for real pfoof of economic progress.
7. Because of the consumer’s high leverage ratio and negative home equity issues, the unemployment will behave as a leading indicator rather than a lagging indicator.
8. Any persistent inflation pressure is most probably several years out. But that is several years away.
9. That doesn't imply hyperinflation by any means, but it does suggest a near-doubling of the U.S. CPI over the coming decade, with most of the pressure coming several years from now.
10. A general bias towards defending against inflation and U.S. dollar weakness will be a useful stratey over the coming decade, but the strategy will not be a persistently profitable
Click to read the complete article
1. As of last week, the Market Climate for stocks remained characterized by modestly unfavorable valuations and mixed market action, therefore Hussman Growth Fund is fully hedged.
2. Long-term outlook for S&P500 is that it will deliver a 7.8% annual return over the coming decade.
3. Short-term, market is not longer overbought, nor it is oversold.
4. Thursday's employment report was better than John Hussman expected at the beginning of the year.
5. But the market’s second quarter advance requires a favorable economic development, not just a “less bad” situation.
6. Price-volume action suggests increasing impatience among investors for real pfoof of economic progress.
7. Because of the consumer’s high leverage ratio and negative home equity issues, the unemployment will behave as a leading indicator rather than a lagging indicator.
8. Any persistent inflation pressure is most probably several years out. But that is several years away.
9. That doesn't imply hyperinflation by any means, but it does suggest a near-doubling of the U.S. CPI over the coming decade, with most of the pressure coming several years from now.
10. A general bias towards defending against inflation and U.S. dollar weakness will be a useful stratey over the coming decade, but the strategy will not be a persistently profitable
Click to read the complete article
