One who intends to leave others better off for his having existed.


John Hussman on equity bubbles

“...this is an equity bubble, and a highly advanced one. is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme.

...the present one is diffused across all sectors in a way that makes valuations for most stocks actually worse than in 2000.

...the primary driver of the market here is not valuation, or even fundamentals, but perception.

The perception is that somehow the Federal Reserve has the power to keep the stock market in suspended and even diagonally advancing animation, and that zero interest rates offer “no choice” but to hold equities.

Be careful here.

...the Fed has now created $4 trillion of idle currency and bank reserves that must be held by someone, and because investors perceive risky assets as having no risk, they have been willing to hold them in search of any near-term return greater than zero.

...the Federal Reserve can certainly postpone the collapse of this bubble, but only by making the eventual outcome that much worse.”

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