The stock market is in a “cluster of woes” that risks steep, abrupt losses, according to investors citing the 2008 crisis.

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  • Stock market conditions are among the worst in history, says market guru John Hussman.

  • The market risks seeing sudden sharp declines, similar to other periods of weakness such as 1987 and 2000.

  • A stock market decline of as much as 65% wouldn’t be surprising, Hussman said.

Stock market conditions are among the worst in history, and investors risk seeing steep declines in line with other extreme selloffs, veteran investor John Hussman wrote in a note this month.

The Chairman of the Hussman Investment Trust – that predicted the market declines of 2000 and 2008 – warned investors of a new fallout for stocks. That’s because the market is in what he described as a “cluster of distress” and money-making conditions are among the worst in history, he warned.

Stocks appear the most overvalued since 2021 and since the five weeks around New Year’s Eve in 1929, Hussman said, citing his investment firm’s “most reliable valuation metrics.”

If stock prices were to rise even higher, the market’s internal fundamentals would likely shift toward unfavorable conditions, such as those that preceded “the market’s most extreme losses” since 2007.

“We estimate that current market conditions are now among the worst 0.1% in history – more comparable to major market peaks and unlike 99.9% of all post-war periods,” Hussman said in a recent note.

Other “similarly extreme cases,” including the 2000 dot-com bubble, have typically been followed by an “abrupt” stock market decline, Hussman said. These losses ranged from 10% to 30% and lasted six to ten weeks.

The losses could be even greater…

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