Renowned investor John Hussman has sounded the alarm bells, suggesting that the stock market is teetering on the edge of a significant decline. Drawing parallels to the lead-up to the 1929 crash, Hussman warns that the current market conditions resemble those of a major bull market peak. He points to extreme valuations and unfavorable market internals as signs that investors are overly optimistic and driven by fear of missing out.
Hussman’s firm’s valuation measure for stocks indicates that the S&P 500 is priced at levels not seen since 1929, right before the market collapsed. Based on internal metrics, his firm anticipates the S&P 500 to underperform Treasury bonds by a significant margin over the next 12 years, marking the worst predicted performance in history.
While Hussman refrains from making an official forecast, he maintains a strongly bearish outlook on equities, suggesting that a crash as steep as 65% wouldn’t be surprising given the current speculative bubble. As an investor who accurately predicted the 2000 and 2008 market crashes, his warnings carry weight in the financial community.
