An Insightful Comment from Hussman

A selection from this week's Hussman commentary, which I mentioned earlier today.

From our standpoint, the return/risk profile of the equity market is the most negative that we ever observe historically, so we are willing to speculate neither on the hope for government wisdom, nor on the hope for government recklessness. Investors who are convinced that monetary and fiscal actions will drive the market ever higher can easily offset our hedges by establishing exposure to the S&P 500 or more speculative alternatives. What I can't do on behalf of those investors is violate our discipline and take a speculative exposure in an environment where the historical evidence indicates an extraordinarily hostile return-to-risk tradeoff. 

Every measure that I follow agrees with Hussman. There is no way to predict how long these conditions will last, but anyone who is predicting that it will continue indefinitely is making a very bad bet.