hussman

mal wieder geniales von hussman

http://hussmanfunds.com/wmc/wmc061016.htm highlights:

Even barring a full-fledged bear market, it's notable that the Dow has now gone over 900 trading days without even a 10% correction. The current advance is among the 5 longest uncorrected advances on record. The accompanying table indicates all prior instances where the Dow advanced more than 600 trading days without a 10% correction, along with the price/peak earnings ratio of the S&P 500 and the 10-year Treasury bond yield at the market high, and the extent of the ensuing decline. The declines listed don't necessarily represent bear markets, but only the extent of Dow losses before the next 10% advance (which in many cases was followed by yet another plunge).

Date	Trading Days	P/E at high	T-bond yield	Decline
09/03/1929	719	20.6	3.8%	-40.0%
03/10/1937	654	11.3	2.5%	-14.9%
05/29/1946	1020	16.2	2.1%	-23.2%
01/05/1953	617	9.4	2.8%	-13.0%
07/12/1957	960	13.0	3.7%	-19.4%
02/09/1966	912	17.6	4.6%	-25.2%
08/25/1987	780	19.7	8.9%	-36.1%
07/16/1990	657	13.6	8.6%	-21.2%
08/06/1997	1723	23.7	6.4%	-10.6%
10/13/2006	906	18.3	4.8%

Contrary to popular belief, the bulk of history has been accompanied by lower P/E ratios as well as lower interest rates than we presently observe. Neither of these conditions prevented extended market advances from being punctuated by significant declines.

Suffice it to say that even if the market was to advance further by 10% or more (which I view as improbable), the likelihood of investors actually retaining the gain would be fairly negligible. We'll accept those risks that are appropriate, but there's no sense running off to juggle dynamite with the other kids, just because they're having fun right now.