John Hussman, an asset-bubble expert, forecasts the ongoing rally in US stocks will "end in tears." The S&P 500 risks a 64% collapse given extreme valuations and "unfavourable market internals," he said. "There is a particular 'setup" that we've historically found to be associated with abrupt 'air pockets' and 'free falls' in the S&P 500. It combines hostile conditions in all three features most central to our investment disciple: rich valuations, unfavourable market internals, and extreme overextension." "At present, the valuation extremes we observe imply that a -64% loss in the S&P 500 would be required to restore run-of-the-mill long term prospective returns.

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Persons: John Hussman, I've Organizations: Service, Hussman Investment Locations: Wall, Silicon, macrotrends.net