Down goes the Dow

“On Wall Street, urgent stupidity has one terminal symptom, and it is the belief that money is free. Investors have turned the market into a carnival, where everybody “knows” that the new rides are the good rides, and the old rides just don’t work. Where the carnival barkers seem to hand out free money just for showing up. Unfortunately, this business is not that kind – it has always been true that in every pyramid, in every easy-money sure-thing, the first ones to get out are the only ones to get out. We’ve seen two-tiered markets before: most prominently in 1929, 1968-69, and 1972. Even at those pre-crash extremes, the S&P never sold above 20 times record earnings. The market clearly faces problems at a multiple of 32. Technology stocks will ultimately fare worse. Over the past 5 years, the revenues of S&P 500 technology companies have grown at a compound annual rate of 12%, while the corresponding stock prices have soared by 56% annually. Over time, price/revenue ratios come back in line. Currently, that would require an 83% plunge in tech stocks (recall the 1969-70 tech massacre). The plunge may be muted to about 65% given several years of revenue growth. If you understand values and market history, you know we’re not joking.”

– John P. Hussman, Ph.D., March 7, 2000

Guess what? Hussman’s prediction was exactly an 83% drop.

That's very impressive Igy, but the problem is since posting that in 2000, his fund has lost 34% of its value.

Clearly, one would have ample reason to not give much credence to anything he has said since.

For comparison, The SNP 500 has 165% and the Nasdaq has risen 271%.

Ghost of Igloi wrote:

Sally Vix wrote:

Nasdaq closing in on 14,000. S & P 500 closing in on 4,000. Dow all-time high.

Hussman Strategic Growth closing in on bankruptcy.

NASDAQ only index you mentioned above HSGFX on a year-to-date basis as of Friday’s close, and even it was well below Hussman the previous week.

Oh, the current GAAP PE for the S&P 500 using 3,915.59 close and estimated 2020 EPS of $91.68 (72% Q4 companies reported) is 42.71. This is one of the highest levels ever, reaching Tech Bubble valuations. As a reminder, the NASDAQ dropped 83% from March 2000 to October 2002.

The Nasdaq was at 1,200 at the date you mentioned - October 2002. Since that date, the Nasdaq is up more than 1,100%. No, that is not a typo. The Nasdaq us up more than 1,100%. Just incredible.

Sally Vix wrote:

Ghost of Igloi wrote:

NASDAQ only index you mentioned above HSGFX on a year-to-date basis as of Friday’s close, and even it was well below Hussman the previous week.

Oh, the current GAAP PE for the S&P 500 using 3,915.59 close and estimated 2020 EPS of $91.68 (72% Q4 companies reported) is 42.71. This is one of the highest levels ever, reaching Tech Bubble valuations. As a reminder, the NASDAQ dropped 83% from March 2000 to October 2002.

The Nasdaq was at 1,200 at the date you mentioned - October 2002. Since that date, the Nasdaq is up more than 1,100%. No, that is not a typo. The Nasdaq us up more than 1,100%. Just incredible.

Okay - since the date Igy mentioned here are the performances:

Nasdaq is up 1,100%. Again, not a typo. 1,100%.

Hussmann Strategic Growth - DOWN about 400%. Again not a typo. One is up 1,100% and the other is DOWN 400%.

Hussman's landmark Strategic Growth Fund is down 400% since he said that. LOL. What a fraud.

seattle prattle wrote:

That's very impressive Igy, but the problem is since posting that in 2000, his fund has lost 34% of its value.

Clearly, one would have ample reason to not give much credence to anything he has said since.

For comparison, The SNP 500 has 165% and the Nasdaq has risen 271%.

Seattle - his fund is down WAY down much more than that. Also, the Nasdaq was at 1,200 back then and is up to 14,000 now.

Sally Vix wrote:

Sally Vix wrote:

The Nasdaq was at 1,200 at the date you mentioned - October 2002. Since that date, the Nasdaq is up more than 1,100%. No, that is not a typo. The Nasdaq us up more than 1,100%. Just incredible.

Okay - since the date Igy mentioned here are the performances:

Nasdaq is up 1,100%. Again, not a typo. 1,100%.

Hussmann Strategic Growth - DOWN about 400%. Again not a typo. One is up 1,100% and the other is DOWN 400%.

down 400% eh there sally? So you have to send more money in each month?

agip wrote:

Sally Vix wrote:

Okay - since the date Igy mentioned here are the performances:

Nasdaq is up 1,100%. Again, not a typo. 1,100%.

Hussmann Strategic Growth - DOWN about 400%. Again not a typo. One is up 1,100% and the other is DOWN 400%.

down 400% eh there sally? So you have to send more money in each month?

Meant 40%

Ghost of Igloi wrote:

John P. Hussman, Ph.D., March 7, 2000

Big deal, anyone can get a PhD these days

Sally Vix wrote:

seattle prattle wrote:

That's very impressive Igy, but the problem is since posting that in 2000, his fund has lost 34% of its value.

Clearly, one would have ample reason to not give much credence to anything he has said since.

For comparison, The SNP 500 has 165% and the Nasdaq has risen 271%.

Seattle - his fund is down WAY down much more than that. Also, the Nasdaq was at 1,200 back then and is up to 14,000 now.

NASDAQ was nearly 5,000 that day. By the way the index did not above that level for another 15 years.

Ghost of Igloi wrote:

Sally Vix wrote:

Seattle - his fund is down WAY down much more than that. Also, the Nasdaq was at 1,200 back then and is up to 14,000 now.

NASDAQ was nearly 5,000 that day. By the way the index did not above that level for another 15 years.

Nasdaq was 1200 .

Sally Vix wrote:

agip wrote:

down 400% eh there sally? So you have to send more money in each month?

Meant 40%

Protip: When you write 'not a typo' make sure you aren't publishing a typo.

?

seattle prattle wrote:

That's very impressive Igy, but the problem is since posting that in 2000, his fund has lost 34% of its value.

Clearly, one would have ample reason to not give much credence to anything he has said since.

For comparison, The SNP 500 has 165% and the Nasdaq has risen 271%.

I am pretty sure your numbers are incorrect, but even if so, beside the point. The point is valuation. Now one can say that metric is meaningless, and no longer relevant. OK. Clearly there are very odd events taking place in financial markets, on a nearly daily basis. Gains are made in the middle of the night. Bitcoin, GME, SPACs, Small Caps, Tech comapnies with no earning, real estate; the list is endless, really.

I know we need quite a bit of inflation to ease the debt burden, but yeah we'll also need to borrow a lot at the higher interest rates inflation brings.

And who's to say that inflation won't get out of control? that's a mighty vertical line.

https://twitter.com/charliebilello/status/1358902334441615368?s=20

Sally Vix wrote:

Ghost of Igloi wrote:

NASDAQ was nearly 5,000 that day. By the way the index did not above that level for another 15 years.

Nasdaq was 1200 .

The Nasdaq was 5,048.62 on 3/10/20.

It closed today at 13,987.64.

So for the nearly 20 years from 3/10/20 till today, the average annual return was @ 5.25%.

So settle down.

The Unkle wrote:

Sally Vix wrote:

Nasdaq was 1200 .

The Nasdaq was 5,048.62 on 3/10/20.

It closed today at 13,987.64.

So for the nearly 20 years from 3/10/20 till today, the average annual return was @ 5.25%.

So settle down.

all these calculations should include dividends. Not sure if y'all have been.

agip wrote:

The Unkle wrote:

The Nasdaq was 5,048.62 on 3/10/20.

It closed today at 13,987.64.

So for the nearly 20 years from 3/10/20 till today, the average annual return was @ 5.25%.

So settle down.

all these calculations should include dividends. Not sure if y'all have been.

I am quoting numbers from the Nasdaq.

No idea how the number is calculated.

On another topic, let's see if we can keep the fear going.

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