Is this the week the Dow will break 12,000? Will we once again see $50 barrel oil? Are we in a Goldilocks economy? These are all questions that investors are confronted with by the financial press. In today's "Outside the Box," we will focus our attention on a well-thought piece by John Hussman, Ph.D. John is the President of Hussman Investment Trust where he manages the Hussman Strategic Total Return Fund - HSTRX and the Hussman Strategic Growth Fund - HSGFX.
In his Weekly Market Comment, John addresses the continued bull market run and compares it in duration to that of previous market cycles. We have currently gone 906 days without a 10% correction. John goes on to further explain the meaning behind this trend by discussing the level of P/E ratios and the climate for bond yields. One particular interesting part of his analysis is when he shows returns over a "full market cycle.
So, how does a money manager with these views cope in today's market? I keep John's comments about what he is doing in his fund so you can see what this highly regarded professional hedges his bets. I think you will find what he is doing to be instructive.
While most investors continue to watch their streaming ticker for new record highs, we are patiently waiting for the raw data to form our investment decisions. I believe you will find this commentary to be both valuable and "outside the box."
This week's analysis comes to us from Steve Leuthold of The Leuthold Group. They are located in Minneapolis and put out lots of financial analysis including the monthly Perception for the Professional.
In the publication is Steve's monthly commentary called "View from the North Country" and this month's topic takes a look at the bull and bear arguments for the markets. Bullet points of some of the top arguments for a bull and a bear market are presented followed by Steve's viewpoint on the subject. Many of my regular readers will notice that his views differ from mine on some points and match mine on others, but all the positives and negatives help build the case for the Muddle Through Economy and that is why it is this week's Outside the Box.