Hussman Weekly Commentary: Anatomy of a Punch Line
The punchline is that the economy and the market are due for a sustained downward trend. Hussman is bearish and, once again, I hope he's wrong.
Read the whole thing.
Hussman Funds - Weekly Market Comment: August 31, 2006 - Anatomy of a Punch Line:
"As of last week, the Market Climate for stocks remained characterized by unfavorable valuations and unfavorable market action, holding the Strategic Growth Fund to a fully hedged investment stance. On a shorter term basis, the market is again overbought. There are few times that I have any sort of opinion about short-term market action, but overbought conditions in unfavorable Market Climates (and oversold conditions in favorable Market Climates) are among the exceptions.
Some of the worst market outcomes on record have followed on the heels of overbought rallies in periods when both valuations and the overall quality of market action have been unfavorable. In my view, Friday's rally on a distinctly stagflationary GDP report represented a good opportunity to do some lightening up of stock market exposure for investors who have not already done so, and would not easily tolerate a decline of 30% or so in the major indices."