Hussman Reliable valuation measures remain near their 1929 and 2000 extremes

The chart below presents the ratio of nonfinancial market capitalization to gross value-added. 

MarketCap/GVA is our most reliable valuation gauge in market cycles across history, including recent decades. 

Notice how little impact the 2022 market decline to-date has had on valuations. Though recent market losses have removed the most extreme speculative froth, our most reliable valuation measures remain near their 1929 and 2000 extremes.

John P. Hussman December 2022

https://www.hussmanfunds.com/comment/mc221219/

 

When the walls come down, investors will scavenge the news for “catalysts.” Don’t fall into this trap. 

Undoubtedly, some “catalyst” will be found, but the mistake will be in believing that the collapse is caused by that piece of “bad” news. 

The important question to ask is “What drove the bubble?” That’s where the lessons are. 

John P. Hussman, Ph.D. President, Hussman Investment Trust July 2021

https://englundmacro.blogspot.com/2021/07/what-triggered-crash-hussman-funds.html