Warning of potential market crash due to record high valuations, signaling downside for stocks

From Business Insider: 2024-07-27 05:00:00

John Hussman, president of Hussman Investment Trust, warns of record high valuations. His preferred metric, total market cap of non-financial stocks to total revenue, predicts -6% annual returns over 12 years. Market internals signal potential downside, with signs of a weakening labor market and uncertainty ahead as Fed may cut rates.

Hussman’s track record includes predicting previous market crashes accurately. Despite recent underwhelming returns, his warnings for a potential crash align with other credible voices like Jeremy Grantham. While new bull market offers returns, the risk of a larger crash looms. Investors must weigh the balance of potential gains and losses.



Read more at Business Insider: Stock Market Crash: Reliable Valuation Measure Just Hit All-Time High