High valuations, despite their little influence on short-term returns, often mean devastating outcomes for investors over a longer period. There's also what he calls "poor market internals," which he tracks through a proprietary measure that monitors the breadth of individual stock performance. Hussman FundsThe combination of poor internals and high valuations are why Hussman says losses could come out of nowhere, and quickly. "Historically, the combination of extreme valuations and unfavorable market action has created a 'trap door' situation for the market," Hussman said. Rather, the steepest market losses have generally emerged from that combination of market conditions, and these losses tend to emerge abruptly, without additional warning."

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Persons: John Hussman, Hussman, Irving Fisher catastrophically, Here's, There's, they've, Buckle, Hussman bullish Organizations: Hussman Investment Trust