Hussman's Weekly Market Comment - Still Overvalued
Hussman remains bearish...
Hussman Funds - Weekly Market Comment: March 27, 2006 - The Big Chair:
I wish I could find a flaw in his rationale... unfortunately, I cannot. We can only hope that any eventual correction will be mild in both duration and depth.
"In short, the S&P 500 is richly valued on the basis of nearly every fundamental measure, including earnings when those figures are properly considered. The point is not to predict a near-term decline in stocks, but rather to emphasize that the long-term returns priced into stocks here are likely to be disappointing. Given that stocks are unlikely to produce much, if any, risk premium versus risk-free Treasury yields, it follows that a hedged investment position is unlikely to diminish long-term returns, though hedging is clearly likely to reduce risk. The case for risk management here continues to be compelling - perhaps not from a short-term trading perspective, but comfortably for longer term investors."