Some excerpts:
On Saturday, the consensus of economists surveyed by Blue Chip Economic Indicators indicated expectations that growth will be sluggish into next year, but that there will be no recession. Unfortunately, the economic consensus has never accurately anticipated a recession. For my part, the outlook has changed. I expect that a U.S. economic recession is immediately ahead.and
One way to understand this change in outlook is to examine our 4-indicator “rule of thumb” – a simple composite of readily obtainable indicators that have been observed in every U.S. recession. It is a syndrome of conditions that are logically and historically related to economic weakness, none particularly informative when observed individually, but important when they occur together. They are: widening credit spreads, a moderate or flat yield curve, falling stock prices, and a weak ISM Purchasing Managers Index. Notice that we are not interested in the behavior of any single indicator, but rather in a group of indicators that collectively indicate deteriorating growth expectations and rising credit risks.and this very insightful comment on investment regret ( or buyer's remorse ):
Anytime you discover you are taking too much risk, realize in advance that you will experience some level of regret as you correct it – if you sell your first portion and the market advances, you'll regret having sold anything. If you sell your first portion and the market continues to decline, you'll regret that you didn't sell everything. The way to keep from being “paralyzed” in the financial markets is to realize in advance that gradually changing an investment position will always involve regret. It is better to “lock in” an acceptable level of regret than to risk an unacceptable loss.I own some of each of the Hussman Funds because of his well developed approach to risk control. I also read his weekly remarks faithfully, because he consistently teaches me new things.
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