"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 â€œsafeâ€ stocks or sectors that might avoid the damage, and are overestimating both the likelihood and the need for some recognizable â€œcatalystâ€ 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