{"id":592594,"date":"2026-07-18T20:53:47","date_gmt":"2026-07-18T20:53:47","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/592594\/"},"modified":"2026-07-18T20:53:47","modified_gmt":"2026-07-18T20:53:47","slug":"permabear-who-called-dot-com-crash-says-hes-watching-these-market-signals","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/592594\/","title":{"rendered":"Permabear Who Called Dot-Com Crash Says He’s Watching These Market Signals"},"content":{"rendered":"

John Hussman<\/a> isn’t budging. <\/p>\n

The famed permabear, who’s best known for calling the dot-com blowup, remains unmoved from his prediction of a major stock crash looming. He says there are a handful of warnings that suggest markets have reached a “speculative extreme” possibly even surpassing the years leading up to 1929 and 2000. <\/p>\n

All in all, the signs point to an S&P 500 decline of as much as 75% in the coming years, Hussman wrote in a client note this week, a slightly more catastrophic view than his prior prediction that stocks could suffer a 70% drop<\/a>.<\/p>\n

It’s possible the benchmark index could weather a shallower 55% loss, assuming the profit margins large companies have earned over the past decade are permanent, he said.<\/p>\n

“The current level of stock market valuations remains \u2014 easily \u2014 the most speculative extreme in U.S. financial history,” Hussman wrote. <\/p>\n

Hussman is known for regularly speculating about apocalyptic drops in markets, enduring in his call even as stocks have posted double-digit annual gains in recent years. He pointed to a handful of signals that justifiy his downside risk estimate:<\/p>\n

1. “Extreme” valuations<\/p>\n

\"Chart<\/p>\n

Hussman Strategic Advisors<\/p>\n

Stocks look extremely expensive from a historical standpoint. The ratio of nonfinancial market capitalization to gross value-added, which Hussman called his “most reliable gauge” of market valuation<\/a>, is now at the highest level ever, surpassing its peak in the years leading up to the 1929 crash, he said.<\/p>\n

“In prior market cycles, the gap between prevailing valuations and historical norms has generally been closed, which is part of the reason why our baseline risk estimate for the S&P 500 is a loss of about 75%,” he said, adding that the same indicator was what led him to project an 83% loss prior to the burst of the internet bubble.<\/p>\n

When adjusting for average nonfinancial profit margins, the average 12-year annual nominal total return of the S&P 500 when valuations were at this level hovers around 0%, per Hussman’s analysis.<\/p>\n

2. Corporate profits look fueled by deficits<\/p>\n

\"Chart<\/p>\n

Hussman Strategic Advisors<\/p>\n

Corporate earnings have been strong, but there are signs that profits are being fueled by large deficits in the government and US households. <\/p>\n

Corporate free cash flow<\/a>, one reflection of how profitable companies are, looks like a “mirror image” of the combined deficit between the US government, households, and foreign trading partners, he said, citing his firm’s analysis of data from the Bureau of Economic Analysis.<\/p>\n

“When we consider the fact that nearly 90% of corporate equities are owned by the wealthiest 10% of households, and that the other 90% finance their shortfalls by issuing liabilities like consumer debt that’s accumulated directly or indirectly by the top 10%, we see very clearly that the wealth enjoyed by one group is the mirror image of the income shortfalls of others,” he said.<\/p>\n

3. Margin debt is at extremes<\/p>\n

\"Chart<\/p>\n

Hussman Strategic Advisors<\/p>\n

More investors are borrowing money to invest, another sign of “speculative exuberance” in the market, Hussman said.<\/p>\n

The ratio of margin debt to GDP is moving toward 4.5%, the highest level ever recorded.<\/p>\n

Historically, sharp peaks in the ratio have been followed by sharp pullbacks in the market, as was the case leading up to the dot-com crash, the Great Financial Crisis, and the bear market in 2022, Hussman noted.<\/p>\n

4. IPO frenzy<\/p>\n

The hype for companies set to go public soon is another red flag, Hussman said. At currently estimated valuations, companies that are expected to IPO<\/a> this year are worth around 12% of the US’s total GDP, he said.<\/p>\n

Proceeds from IPOs already hit a record high in 2026, with newly public companies raising a combined $142.4 billion. That’s up 792% from levels last year, according to data from Renaissance Capital.<\/p>\n

“History has always brought today’s sort of speculative exuberance to much more distressing conclusions,” Hussman said of the fate of the stock bubble<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"John Hussman isn’t budging. The famed permabear, who’s best known for calling the dot-com blowup, remains unmoved from…\n","protected":false},"author":2,"featured_media":592595,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[177],"tags":[2552,79,251121,18,3428,19,17,251119,4162,1082,234,235,34786,58592,1084,12443,251122,1086,251120,9495,3257],"class_list":["post-592594","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-analysis","tag-business","tag-dot-com-crash","tag-eire","tag-government","tag-ie","tag-ireland","tag-john-hussman","tag-loss","tag-market","tag-personal-finance","tag-personalfinance","tag-profitable-company","tag-ratio","tag-sp","tag-sign","tag-speculative-exuberance","tag-stock","tag-us-household","tag-valuation","tag-year"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116942969740570626","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/592594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=592594"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/592594\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/592595"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=592594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=592594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=592594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}