One of the things to remember about investing is that the higher the price you pay today, for a given stream of future cash flows, the lower the long-term returns you can expect. It’s exactly when past returns are most glorious that future prospects are most dismal. – John P. Hussman,
The information contained in earnings, balance sheets, and economic releases is only a fraction of what is known by others. The action of prices and trading volume reveals other important information that traders are willing to back with real money. This is why trend uniformity is so crucial to our Market Climate approach. Historically, when trend uniformity has been positive, stocks have generally ignored overvaluation, no matter how extreme. When the market loses that uniformity, valuations often matter suddenly and with a vengeance. This is a lesson best learned before a crash rather than after one. – John P. Hussman, October 3, 2000
The information contained in earnings, balance sheets, and economic releases is only a fraction of what is known by others. The action of prices and trading volume reveals other important information that traders are willing to back with real money. This is why trend uniformity is so crucial to our Market Climate approach. Historically, when trend uniformity has been positive, stocks have generally ignored overvaluation, no matter how extreme. When the market loses that uniformity, valuations often matter suddenly and with a vengeance. This is a lesson best learned before a crash rather than after one. – John P. Hussman, October 3, 2000
Valuations change. Market internals change. We need not predict the trajectory of the wind. We just need the willingness, discipline, and wisdom to adjust the sails.
