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☆ A notorious market bear who called the dot-com bubble warns that stocks will face losses rivaling 1929, 2000, and 2007 as high valuations and poor investor sentiment create a "trap door" scenario
▼ + stars: | 2023-01-28 | by ( William Edwards | ) www.businessinsider.com time to read: +7 min

There are two major driving forces of stock-market returns, according to John Hussman: valuations and investor sentiment. "Put simply, we estimate that the S&P 500 faces the same prospect of full-cycle loss and return-free risk as it did in 1929, 2000, and 2007. The S&P 500, in its current form since 1957, fell more than 46% from 2000-2002 and more than 52% from 2007-2009. Hussman FundsAs for investors sentiment — or what Hussman calls "market internals" — he uses a proprietary measure of the uniformity of investor behavior. Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009.

☆ A notorious market bear who called the dot-com bubble warns stocks are still as overvalued as they were in 1929 and 2000, setting up the S&P 500 for a 'far deeper retreat' and a decade of negative ret
▼ + stars: | 2022-12-24 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

John Hussman expects a "far deeper retreat" in stocks, despite the S&P 500's 20% loss in 2022. The 20% loss the S&P 500 has suffered this year has most investors searching for a bottom. "Though recent market losses have removed the most extreme speculative froth, our most reliable valuation measures remain near their 1929 and 2000 extremes." He also said he expects -6% returns over the next 10-12 years for the S&P 500. The chart below shows actual market returns (vertical axis) over 12 years when considering market capitalization of non-financial stock-to-gross value added valuations.

☆ Stock Market Crash: Expert Warns 58% Drop Still to Come
▼ + stars: | 2022-11-26 | by ( William Edwards | ) www.businessinsider.com time to read: +6 min

The S&P 500 is down 16% on the year as the Fed tightens policy to fight inflation. The S&P 500 fell as much as 25% this year as the Federal Reserve pulled its support for the US economy. To return to normal valuation levels, the market would have to fall 58% further from where it sits currently, he said. The most bearish strategists among major Wall Street institutions see the S&P 500 falling to around the 3,000, about -25% assuming a recession plays out. He's more bearish than Wilson in the short term, however, with a three-month price target of 3,600 for the S&P 500.

☆ A notorious market bear who called the 2000 and 2008 crashes says stocks would still need to fall more than 50% just to reach valuation norms — and warns of an 'avalanche of earnings disappointments'
▼ + stars: | 2022-10-29 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

John Hussman says stocks would have to fall more than 50% further to hit valuation norms. Stocks have staged an impressive rally in recent weeks, with the S&P 500 up 9% since October 12. For Hussman, valuations are still too high, even though the benchmark index has fallen as much as 25% this year. Still, valuations are nowhere near levels that we associate with satisfactory long-term market returns, so I suspect that more shoes will drop." The earnings disappointments Hussman sees will be caused by restrictive monetary policy from the Federal Reserve that weigh on demand.

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