Article Don’t Let Valuations Drive Your Investing Decisions

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Everywhere I turn these days, I see articles discussing how over-extended U.S. equity valuations have become. If I took a shot of mouthwash every time I came across an article that talked about U.S. equity valuations, I’d be leaving Las Vegas, Nic Cage-style, minus Elisabeth Shue. I monkey-hammered the idea of valuation as a catalyst for an equity market drawdown several weeks ago, but this week it’s woodshed time for Mr John Hussman.
Hussman has a brand new commentary beating the same dead “S&P 500 is overvalued” horse, but this time he’s coined a new phrase to describe the S&P 500: “offensively overvalued.”
While I obviously can’t say for certain what this guy uses to make investment decisions, it’s not a stretch to assume that valuation is a core part of his process, given how outspoken he is on the topic and how often he writes about it. Hussman’s  favorite measures of valuation have registered as overvalued since 2012, which might explain why his flagship fund is in the midst...
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