Stock Market Crash: Bubble Expert Warns 60% Further Downside Ahead

Hussman uses his proprietary margin-adjusted price-to-earnings ratio.Stocks are risky. Treasury bonds are not. So when investing in stocks, investors ought to take into account their return potential relative to risk-free rates to determine whether or not they are a worthy investment., the president of the Hussman Investment Trust who called the 2000 and 2008 market crashes.

Sometimes they have reverted even further, to levels on par with a 5% premium over Treasury yields or 10% over Treasury yields .This time, Hussman believes stocks are headed for the green line, getting them back to levels in line with a 10% premium over Treasurys. This happened during the 1929 and 2008 crashes, and nearly happened during the dot-com crash in 2000. This would mean around 60% further downside from levels seen earlier this week, when Hussman published the commentary.

Another way of showing the decline potential to get back to levels associated with better returns than Treasurys is in the chart below. So far, the S&P 500 has not fallen nearly as close to its decline potential as it has in prior crashes over the last 100 years.Hussman had company in two widely followed market strategists this week regarding his high valuation call.

"The current PE of around 18x is very vulnerable, and not just against sharply higher cash/bond yields," Edwards said."The current nosebleed level of valuations seen in the US PEG ratio is a result of theGoldman Sachs' David Kostin

Nigeria Nigeria Latest News, Nigeria Nigeria Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

DATA: Is Phoenix heading toward a housing crash or a stable market?Housing demand is falling, but spring typically marks a rise in demand. So the question is: Will the market stabilize or continue to tumble? The data indicates that either scenario is possible. MORE ⬇️
Source: abc15 - 🏆 263. / 63 Read more »

Nvidia’s stock-market hot streak is far from over, according to Wall Street analystsNvidia's stock has been a massive outperformer lately, and the company's latest results suggest to some analysts that the name is not done running up. Such Bs… $pypl Wall Street analysts are getting paid or bag holders this is why $nvda earnings were 🗑 🚮
Source: MarketWatch - 🏆 3. / 97 Read more »

Stock market news today: S&P 500 looks to snap a 4-day losing streakUS stocks rise as the S&P 500 looks to snap a 4-day losing streak
Source: BusinessInsider - 🏆 729. / 51 Read more »

Short-dated options trade behind Thursday's U.S. stock market choppiness -Nomura's McElligottAn intraday dip in the S&P 500 Index on Thursday was spurred by large trades in short-dated derivatives that piled selling pressure on the market, according to Nomura strategist Charlie McElligott. Tail wagging the dog. guess this is what we have to look forward to, since its virtually every day now. market has turned into a 100% gambling casino.
Source: Reuters - 🏆 2. / 97 Read more »

Stock market rally won't last as investors become risk-averse: DataTrekThe stock market rally will run out of steam because investors are shifting to risk-off even as inflation expectations ease
Source: BusinessInsider - 🏆 729. / 51 Read more »