Next stock market crash: How coronavirus could jumpstart the process - Business Insider

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A notorious market bear says investors are making a classic error at the worst possible time — and warns coronavirus 'chaos' could kickstart a 67% market crash

to lose about two-thirds of its value from its recent high to the trough of the next bear market," Hussman penned in a recent note. "As I've regularly observed, a decline of that magnitude would not be a worst-case scenario."

Hussman provided his proprietary estimated 12-year annual total return for a conventional portfolio compared against the actual subsequent 12-year returns for that portfolio to demonstrate his thinking through a visual medium. Although this measure is off of its low of -0.16%, it still paints a dismal outlook. As of February 27th, it's projecting just 0.70% returns for the next 12 years.

The environment that Hussman paints above is reminiscent to bubbles of the past. Large gains, high valuations, and diverging internals followed by a swift unwind.

 

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