| Hey, T77. They may call it a correction, in the longest bull market, ever, but it'll feel like a bear market. It could be like '87, as earnings will grow and prices drop (a correction). It's not about rates rising, it's about long bond prices falling. One may say that's semantics, but it really isn't. You need no economic policy, fiscal policy, monetary policy, or regulatory policy changes for this to occur. Just a perception of the loss of value from the sheeple. We are starting organic growth, not 'stimulated growth', therefore valuations will correct to single digit PE's. We've never had a new secular bull without single PE's. It's not about the E, it's about the P. After the correction, wherever it lands, the mother of all bulls markets will begin, and that can only occur with nobody aboard the train. Those that held through the lost decade are eyeing retirement currently, and they know they don't have another decade to waste. Their heuristic bias will cause them to sell in mass. Add to it the pension crisis accelerating, caused by the bond crisis, and that'll scare pre-retirees even more. I would take Hussman seriously. The only thing he missed in my opinion is the affects of QE. But, so did most analysts, because it was an experiment. It's just a matter of when this will give up the ghost, not if. Money managers are still over-weight U.S. equities!! What fools. |
