"In any event, trust that we have no intention of abandoning the lessons of history in the belief that they no longer apply. That in itself is one of the lessons of history – every market collapse ultimately comes as a surprise to investors, because something always convinces them that this time should have been different. "
The question is will you be surprised or are you ready?
never understood the criticism of Hussman using historical data which is the basis of most of his method.He's not making this data up. The only major decision I can attribute to his , "personal dogma" if you will, is the "Depression era stress testing".
my criticism is that he tends to only show the data that illustrates the story he wants to tell. For a long time, he used the price to book ratio as a measure of valuation. He's stepped away from this as it doesnt show the same level of overvaluation as some other measures. The P/B ratio is about 2.5, down from 3 in 2007 and 5 in 2000. Historically this measure has averaged around 1.8 so it is still elevated just not to the degree that hussman wants to show. In the long run however, the return on shareholders equity has probably been more stable than any other measure.