"In my view (supported by a century of market cycles across history), investors are vastly underestimating the prospects for market losses over the completion of this cycle, are overestimating the availability of “safe†stocks or sectors that might avoid the damage, and are overestimating both the likelihood and the need for some recognizable “catalyst†to emerge before severe market losses unfold. We presently estimate median losses of about -63% in S&P 500 component stocks over the completion of the current market cycle. There is not a single decile of stocks for which we expect market losses of less than about -54% over the completion of the current market cycle, and we estimate that the richest deciles could lose about -67% to -69% of their market capitalization. As in 2000 and 2007, investors are mistaking a wildly reckless world for a permanently changed one, and their reeducation in the concept that valuations matter is likely to be predictably brutal."
--John Hussman, Weekly Commentary 8/7/2017
