John Hussman Predicts an 80% Chance of Second Market Collapse

By on December 3, 2009

Henry Blodgett recently published an article regarding the views of John Hussman, considered by many to be a thoughtful and far-sighted money manager, but one who has largely missed the rebound since March.

Hussman has recently written, “In my estimation, there is still close to an 80% probability (Bayes’ Rule) that a second market plunge and economic downturn will unfold during the coming year. This is not certainty, but the evidence that we’ve observed in the equity market, labor market, and credit markets to-date is simply much more consistent with the recent advance being a component of a more drawn-out and painful deleveraging cycle. Meanwhile, valuations are clearly unfavorable here, and even under the “typical post-war recovery” scenario, we are observing an increasing number of internal divergences and non-confirmations in market action.”

Source:

Businessinsider.com
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