John Hussman just released his shareholder letter. These are some key takeaways.
Strategic Growth Fund has achieved an average annual total return of 8.86% from its inception on July 24, 2000 to Jun 30, 2009, compared with an average annual loss of -3.32% for the S&P500 index.
The absolute returns of both the stock and bond markets have produced weak returns, where were the predictable outcome of extraordinary rich valuations that existed at the beginning of the decade and persisted, to a large extent, until 2008. It is not likely that we are completely out of the woods.
Despite volatility of the past two years, I continue to view stock and bond market valuations as relatively elevated. As of 7/31/2009, the best estimate of prospective 10-year returns for the S&P500 is in the area of 7.2% annually.
The prospective long term returns in stocks markets are not yet sufficient to prompt us to accept significant amounts of market risk.
From a stock selection perspective, Fund continues to emphasize companies and industries reflecting strong stable revenue growth and profit margins, balance sheets generally having low levels of debt, and valuations that we view as favorable based on the long-term stream of cash flows that investors can expect over time.
One of the crucial lessons of recent years is the importance of avoiding deep losses. The market are far more forgiving of missed gains than they are of large losses, particularly when valuations are rich.
Read the complete letter
Also check out:
Strategic Growth Fund has achieved an average annual total return of 8.86% from its inception on July 24, 2000 to Jun 30, 2009, compared with an average annual loss of -3.32% for the S&P500 index.
The absolute returns of both the stock and bond markets have produced weak returns, where were the predictable outcome of extraordinary rich valuations that existed at the beginning of the decade and persisted, to a large extent, until 2008. It is not likely that we are completely out of the woods.
Despite volatility of the past two years, I continue to view stock and bond market valuations as relatively elevated. As of 7/31/2009, the best estimate of prospective 10-year returns for the S&P500 is in the area of 7.2% annually.
The prospective long term returns in stocks markets are not yet sufficient to prompt us to accept significant amounts of market risk.
From a stock selection perspective, Fund continues to emphasize companies and industries reflecting strong stable revenue growth and profit margins, balance sheets generally having low levels of debt, and valuations that we view as favorable based on the long-term stream of cash flows that investors can expect over time.
One of the crucial lessons of recent years is the importance of avoiding deep losses. The market are far more forgiving of missed gains than they are of large losses, particularly when valuations are rich.
Read the complete letter
Also check out:
