Interesting times

On December 6, the S&P 500 set the most extreme level of valuations on record, exceeding both the 1929 and 2000 market peaks 

(RE: December 7 1941 Attacken mot Pearl Harbor)

https://sv.wikipedia.org/wiki/Attacken_mot_Pearl_Harbor

Reliable valuation measures are enormously informative about both long-term investment returns and the potential depth of market losses over the completion of any given market cycle. 

At the same time, valuations are of strikingly little use in projecting market outcomes over shorter segments of the market cycle. 

Investor psychology – the desire to speculate, or the aversion to risk – has a much stronger impact, 

Investors regularly forget that the central feature of free-enterprise is the continual emergence of innovation-driven “new eras” in which both profit margins and growth rates are trajectories rather than durable numbers.

Yes, the largest companies are very profitable, but that’s nearly always true at speculative extremes. 

That cohort of mega-cap companies is constantly changing, 

and except on their approach to extremes like 1929, 1972, 2000, and today, 

the companies with the largest market capitalizations have historically gone on to lag the S&P 500 over time.

John P. Hussman January 2025

https://www.hussmanfunds.com/comment/mc250107/

Tillbaka till Rolfs länktips 1-2 mars 2025

https://englundmacro.blogspot.com/2025/03/rolfs-lanktips-1-2-mars-2025.html