Just as Igy is prone to be bearish, I am usually bullish on the market ESPECIALLY after a brutal year. But the markets, over time, always go up! I am feeling really good (am sure Igy will put a damper cloth on my optimism) about 2023 and can see the markets returning 20- to 30% for the year.
I have been aggressively adding to short positions.
Businesses ebb and flow. No one cares. No one things this is going to have implications beyond the tech. sector, that coincidentally just experienced a boom cycle fall larger than the current downturn.
Again, no one cares, beyond a concern for the good people in that sector who may be effected.
There's a lot written about this so I don't feel its necessary to start regurgitating the reasons.
It shows the largest companies are getting their margins squeezed. Same for Google, deferring bonuses a quarter. That’s what.
Igy - Hussmann Strategic is off to a really bad start for beginning of the year. Down below 7 and maybe go much lower. The Dow, S & P and Nasdaq are off to a rocking start. Igy, the train leaves the station soon - we would love to have on board but you have to purchase your boarding pass and hop on board. 2023 is going to be rocking for the markets. Last call Igy - please come hop on - we would love to have you!
It shows the largest companies are getting their margins squeezed. Same for Google, deferring bonuses a quarter. That’s what.
Igy - Hussmann Strategic is off to a really bad start for beginning of the year. Down below 7 and maybe go much lower. The Dow, S & P and Nasdaq are off to a rocking start. Igy, the train leaves the station soon - we would love to have on board but you have to purchase your boarding pass and hop on board. 2023 is going to be rocking for the markets. Last call Igy - please come hop on - we would love to have you!
Just as Igy is prone to be bearish, I am usually bullish on the market ESPECIALLY after a brutal year. But the markets, over time, always go up! I am feeling really good (am sure Igy will put a damper cloth on my optimism) about 2023 and can see the markets returning 20- to 30% for the year.
I have been aggressively adding to short positions. Interestingly, John Hussman’s January Market Commentary out today in part addresses what I think is the Bullish mistaken assumption.
“As the Buddha taught, “All things appear and disappear because of the concurrence of causes and conditions. Nothing ever exists entirely alone; everything is in relation to everything else.” With interest rates now well above zero, the primary causes and conditions of the recent speculative bubble are no longer in place. The persistence of rich valuations here are, in my view, largely the result of psychological anchoring and hindsight that treats past prices as a standard of value. We saw the same thing during the 2000-2002 collapse, and it’s dangerous. I had friends who were wiped out, not by buying at the top, but by assuming that once prices had declined by 15%, or 20%, or in some cases 50% from the highs, the retreat somehow represented “value.”
I’ll say this again. Value is not measured by how far prices have declined, but by the relationship between prices and properly discounted cash flows. We presently estimate that the S&P 500 would have to drop to the 2800 level simply to establish prospective 10-year returns equal to those of 10-year Treasury bonds. Restoring a historically run-of-the-mill 5% expected return over-and-above Treasury bond yields would require a decline to the 1850 level. Restoring historically run-of-the-mill 10% expected long-term returns for the S&P 500 would require, by our estimates, a decline to the 1600 level.”
Definition of insanity: Doing the same thing over and over and expecting a different result.
Hussman in 2013 using valuation to determine the next 10 years of return:
"At today’s levels, Hussman estimated that stocks will average approximately 3.5% annually over the next decade."
narrator: Stocks actually averaged 12% annually for that decade.
I have been aggressively adding to short positions. Interestingly, John Hussman’s January Market Commentary out today in part addresses what I think is the Bullish mistaken assumption.
“As the Buddha taught, “All things appear and disappear because of the concurrence of causes and conditions. Nothing ever exists entirely alone; everything is in relation to everything else.” With interest rates now well above zero, the primary causes and conditions of the recent speculative bubble are no longer in place. The persistence of rich valuations here are, in my view, largely the result of psychological anchoring and hindsight that treats past prices as a standard of value. We saw the same thing during the 2000-2002 collapse, and it’s dangerous. I had friends who were wiped out, not by buying at the top, but by assuming that once prices had declined by 15%, or 20%, or in some cases 50% from the highs, the retreat somehow represented “value.”
I’ll say this again. Value is not measured by how far prices have declined, but by the relationship between prices and properly discounted cash flows. We presently estimate that the S&P 500 would have to drop to the 2800 level simply to establish prospective 10-year returns equal to those of 10-year Treasury bonds. Restoring a historically run-of-the-mill 5% expected return over-and-above Treasury bond yields would require a decline to the 1850 level. Restoring historically run-of-the-mill 10% expected long-term returns for the S&P 500 would require, by our estimates, a decline to the 1600 level.”
Definition of insanity: Doing the same thing over and over and expecting a different result.
Hussman in 2013 using valuation to determine the next 10 years of return:
"At today’s levels, Hussman estimated that stocks will average approximately 3.5% annually over the next decade."
narrator: Stocks actually averaged 12% annually for that decade.
the 2022 4Q data are strong. GDP, employment, etc. All good.
But the 2023 data are starting to look pretty sick and indicicative of a recession.
The macro guys are freaking out, selling everything. Maybe holding long term bonds, thinking they will do ok when the economy craters.
BUT
stocks are rising and the sellers seem to have vanished. So the technical analysis people are getting bullish, thinking the October lows were THE lows and we're done now. And even tech has been bouncing.
Maybe we'll get some answers on Thursday when we get a read on 4Q GDP and GDP now flips to predicting the 1Q. I suspect the 1Q23 GDP Now prediction will begin at a very low or even negative number.
It owns things that should do well in a recession: bonds and puts on the stock market.
It will normally lose money but should make money if stocks fall and interest rates fall.
Might be just the thing if we do have a recession. Although if inflation stays high during the recession TAIL would not work well because it would lose money on bonds, which is most of its portfolio. For example, it lost money in 2022 because while its puts made money, its bonds lost more.
The name of the fund refers to 'tail risk' so you can see it's not meant to make money except in bad times.
HFND is also interesting. it's meant to mimic hedge fund returns without the high fees. Its thesis is that hedge funds do beat the market on a risk adj basis, but the high fees make them big losers. So keep the gross returns, drop the high fees, and maybe it's a good alternative investment. I already own this one.
FAX even outperforming NASDAQ YTD up 9.79%, EMD a little less at above 6%….iLOL
Igy - Hussmann Strategic having a bad start to new year. Does it bounce back or stay steady in its decline? Oh by the way, NASDAq IS ROCKING!
Sally,
I sold 10% of my HSGFX holdings early December, and received a 1% capital gain year end. I believe the fund is down less than 2% YTD, as bet with you I believe it will substantially outperform the NASDAQ in 2023. I suspect investors are being sucked into another bear market rally. Time will tell, and that opinion applies to my EM CEFs.
Seven of eight indexes on our world watch list posted gains through January 20, 2023. The top performer was Hong Kong's Hang Sent with a YTD gain of 11.44%. France's CAC 40 was in second with a YTD gain of 8.07%, and Germany's DAXK remained in third with a YTD gain of 7.97%. Coming in last for the third straight week was India's BSE SENEX with a loss of 0.36% YTD.
With all eyes on super-tech bellwether Microsoft, and specifically on how the company's Azure cloud division would do, not to mention what the company would say about its outlook, this is what the company reported moments ago...
I have been aggressively adding to short positions. Interestingly, John Hussman’s January Market Commentary out today in part addresses what I think is the Bullish mistaken assumption.
“As the Buddha taught, “All things appear and disappear because of the concurrence of causes and conditions. Nothing ever exists entirely alone; everything is in relation to everything else.” With interest rates now well above zero, the primary causes and conditions of the recent speculative bubble are no longer in place. The persistence of rich valuations here are, in my view, largely the result of psychological anchoring and hindsight that treats past prices as a standard of value. We saw the same thing during the 2000-2002 collapse, and it’s dangerous. I had friends who were wiped out, not by buying at the top, but by assuming that once prices had declined by 15%, or 20%, or in some cases 50% from the highs, the retreat somehow represented “value.”
I’ll say this again. Value is not measured by how far prices have declined, but by the relationship between prices and properly discounted cash flows. We presently estimate that the S&P 500 would have to drop to the 2800 level simply to establish prospective 10-year returns equal to those of 10-year Treasury bonds. Restoring a historically run-of-the-mill 5% expected return over-and-above Treasury bond yields would require a decline to the 1850 level. Restoring historically run-of-the-mill 10% expected long-term returns for the S&P 500 would require, by our estimates, a decline to the 1600 level.”
Definition of insanity: Doing the same thing over and over and expecting a different result.
Hussman in 2013 using valuation to determine the next 10 years of return:
"At today’s levels, Hussman estimated that stocks will average approximately 3.5% an ""nually over the next decade"At today’s levels, Hussman estimated that stocks will averageapproximately 3.5% an " "nually over the next decade."tha."tha
narrator: Stocks actually averaged 12% annually for that decade.
