Tuesday, August 10, 2010
John Hussman - Valuator extraordinaire?
A short while ago, I chided Dr. John Hussman for not properly considering the increased demand for stocks in a posting of his, and for suggesting that a 6.7% annual return was inadequete for stocks.
However, I also have to note that some of his prior predictions are, so far, spot on track. In February 2005, John suggested that a valuation trend for the next decade, suggested a potential return, based on historical average and median trends, portended a 2 to 3% annual return over the next decade. To date - five and a half years in - after adjusting for dividends, the SPY SPDR (S&P500 index) has produced an annual return of under 1%, while the DIA SPDR (Dow Jones index) has produced just 2.5% annually. While John may seem like a perma-bear, you would be unwise not to consider his thoughts on various valuation issues.