Down goes the Dow

While you wait for it to go down, people are making money when it's going up.

Keep in mind, when you use a duration that stems off of a low or a high, you are using something that tends to be extreme and is not nearly so representative of actual performance as standardized durations like YTD, 1-month, 1-year, 5-year, etc.

I mean, look at Mag 7 ytd and you get a much more realistic....checking.... 26%.

That doesn't sound so incredible.

Don't cherry pick the dates (no pun attended), unless you are looking to enforce some unlikely scenario.

That said, I buy some at this point, and sell some, too, but that has to do with individual circumstances for the most part.

“Bubbles are generated when investors drive valuations higher without simultaneously adjusting expectations for future returnslower. In other words, the defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations. The ‘Bubble Term’ measures the gap between the two.

Unless the Bubble Term is able to become exponentially larger forever – it shows up as a growing gap between the long-term return that investors expect in their heads, and the long-term return that investors can actually expect based on the future cash flows that will ultimately be delivered into their hands. That means that prices have to continually grow faster than fundamentals, in order to juice total returns by the ‘extra’ amount that isn’t delivered by future cash flows.

In order to generate the return in investors heads, the bubble has to supplement deliverable cash flows with ever-larger speculative gains. As a result, sustaining the bubble requires valuation multiples to increase forever, without any upper bound. The reason the current bubble feels so good to investors is that, up until the present moment, valuation multiples have done exactly that.”

– John P. Hussman, Ph.D., The Bubble Term, August 14, 2025

And you are a woke doper that should have sought counseling years ago.

“This enormous domestic imbalance between “haves” and “have nots” means that the “haves” accumulate the financial obligations of the “have nots.” That’s how this house of cards keeps standing. Neither the government nor the average American household is taking in enough income to meet their expenditures. The majority of Federal expenditures are an offset to the fact that U.S. households, in aggregate, don’t earn enough to finance basic needs like healthcare and retirement expenditures. To a large extent, the combined deficit reflects a single underlying dynamic. From an accounting standpoint, record corporate profits are the mirror image of that dynamic.”

John Hussman, October 28, 2025

“It was still necessary to reassure those who required some tie, however tenuous, to reality. The time had come, as in all periods of speculation, when men sought not to be persuaded by the reality of things, but to find excuses for escaping into the new world of fantasy.”

– John Kenneth Galbraith, The Great Crash, 1929

Yes, good point. It's part of why I always found the annual return of a stock/fund/index being from Jan 1 to Jan 1 as somewhat arbitrary and not telling the whole story. It can be helpful to look at 52 week highs and lows and see how far those spreads are for a given investment over time also.

“As I’ve noted before, investors rediscover the idea of a ‘new era’ at every speculative peak. But the reality is that economic growth is nothing but the constant introduction of new eras. The danger occurs when the new era is so satisfying to the imagination that investors abandon any concern about valuation.

Even when an industry is eventually successful, early speculation can have devastating consequences in the interim. Several large technology companies from the tech bubble have gone on to prosper, but not without the Nasdaq 100 losing 83% between March 2000 and October 2002, with these same companies participating in the collapse. The S&P 500 itself lost half its value during that period, from a lower level of valuation than we observe at present.

Similarly, computer companies became a speculative theme in the late-1960’s, as investors abandoned any concern about valuations. Then that “Go-Go” bubble collapsed, resulting in profound losses even before the 1973-74 collapse took the overall S&P 500 down by 50%, from a lower level of valuation than we observe at present.

Benjamin Graham wrote at the time in 1973:

‘Many – if not most – investments in computer-industry companies other than IBM appear to have been unprofitable. Obvious prospects for physical growth in a business do not translate into obvious profits for investors. The habit of relating what is paid to what is being offered is an invaluable trait in investment. The really dreadful losses in the past few years (and on many similar occasions before) were realized in those common-stock issues where the buyer forgot to ask ‘How much?’”

– John Hussman, October 28, 2025

Every single time I try to get a sense of the performance of any investment vehicle that I am looking at, I look at all of the benchmarks we've mentioned here (not just a signle one), including a chart capturing all of that.

And it hardly stops there - I can only understand these in comparison to a benchmark also, like a standard index(es), and relevant competitors.

This can all be done in seconds with Yahoo finance and your brokerage's resources and tools.

Point being, use the tools necessary to understand the context.

I think Hussman's writing is his strong point, and I don't mind reading it whatsoever. His fund and strategy therein is a different story, and it may serve some investors with a concern to limit losses in the case of downturn, but that's not me.

I seem to recollect that you said once that you had a modest stake in his signature fund, at least for a while. Did I remember that wrong?

I did, I believe fall of 2021 through 2023, if I recollect correctly. Bought some dips in the fund, up 15-20%. I may be off a bit. I used the proceeds to add to my EM Bond funds or IRA distributions.

Speaking of Social Security, IRA distributions, and inflation. Last evening while getting ready to go on a short trip we discovered a serious leak on the master bedroom jetted tub faucet. Tried a repair myself, but discovered even though there was a side access panel, to replace the faucet you had to cut the tub tile to get at it. On top of that, there was no way to shut of the water just to the tub. Anyway, we had to shut off the house water for half a day. Found one grocery store that was open after 11:00 pm to buy some water. The repairs for a two hour job, plus hour to pick-up parts was $2,847. I use my IRA distributions typically for such unexpected expenses. At least I am not a Walmart greeter yet, if I live that long.

So you obviously hired some of this out, at that price. Sounds like you did the plumbing yourself, but hired out the tile restoration? What am I missing? Can't see the materials costing nearly that much.

The plumber did the entire project. He cut the tile with an angle grinder, replaced with new Roman tub style faucet, installed shut-off valves, and installed access door. After watching the process I could have repeated over an eight hour day. The plumber was pretty skilled. From what he said it is pretty common problem, and encountered same issue last week. We were hoping to still make the trip, but with clean-up and other stuff going on decided to bag it for later on.

The cost did seem high, but the service got over first thing this morning after an 10:00 pm call. I would say it seemed about $1,000 high. Then again we were going without water, and with me doing the work it could have easily drug into Thursday.

Nice.

I spend a good chunk of my day yesterday helping an elderly neighbor rebuild a planter he has in his parking strip. Which means I did it.

I offered to give his new wood and stuff like that but he wanted to re-use much of the old, undersized, split and broken wood that was there. So I know I will be back replacing that in a few months, and I'm not going to re-do it with junk, which ends up being a big waste of time.

But it's still a good chance to rub elbows with a neighbor...

Good for you. It is rewarding doing projects, and that much more when someone needs a helping hand.

yeah well, you'd think somebody could spare an upvote (?)

Tough crowd around here. LOL.

Lordy, lordy, lordy me!

Been busy at running practice, etc., so haven't been checking after hours moves, but the god damn thing was up +1.69% after hours. And that is on top of a almost 5% in the regular session.

Yowzer.

200 in the g-damned rear view mirror.