“The real problem is that a decade of experimental distortion encouraged unprecedented speculation in every conventional asset class, not to mention fringe speculation in assets detached from any standard of value, including meme stocks, pictures of bored monkeys, and digital Pokémon posing as ‘currency.’ As with every similar episode across history, the unwinding of this bubble in the form of financial crisis is already quietly baked in the cake.”
– Dr. John Hussman, “Central Bankers Wandering in the Woods” September 2023
Today we update Treasury bond and U.S. stock market forward return estimates.
Treasury bond return estimates are very easy. It’s simply the current yield offered by the bonds… assuming the U.S. government doesn’t default of course. Here are the current annualized yields for various maturities: Continue reading “Meme Stocks, Bored Monkey Pictures, Digital Pokémon”
Imagine for a moment it’s 2009 at the tail-end of the Great Financial Crisis, and I’m telling you to get aggressive with your investment strategy.
The economy just went through its worst recession since the Great Depression. At its worst point the U.S. stock market was down 55% from its all-time high in 18 months’ time.
If you were lucky enough to keep your job your salary’s been frozen or even cut. Your home value has decreased dramatically when everyone was saying for years that home values never decline. Family and friends around you are in dire straits as they’ve lost their jobs and their homes. 100+ year-old financial institutions have failed. The government is printing trillions to bail out some of these companies the terms of which are being decided by unelected bureaucrats behind closed doors on weekend evenings when the markets are closed with no transparency. Folks are “occupying” Wall Street to protest bailouts for the “1%.”
Continue reading “How to Outperform Over Full Market Cycles”