How Valuations Can Be Used To Determine Investment Returns

Many readers are asking for my view on current market conditions given the recent ballistic rise…

As I’ve made clear in the past, I don’t predict the market because my risk management disciplines eliminate any need for such nonsense.

With that said, the next best thing to a strict risk management discipline is a valuation discipline, and for education on the current status of the markets relative to the valuation-driven investment approach there is none finer than John Hussman.

In John’s current commentary this week his views are so completely parallel to my own in every way, shape and form that I decided to direct you to his analysis rather than re-creating the wheel. He is a brilliant writer possessing a rare combination of academic pedigree and real world experience in managing money. He knows his stuff.

As a matter of disclosure I’m an investor in John’s funds but receive no compensation and have no arrangements with John if someone invested in his funds. I’m just a fan and supporter of his work because it is sound investment discipline. I enjoy reading his weekly comments and hope you find this particular issue enlightening.

Please make sure to share your thoughts about this article in the comments section below. I would love to create a discussion about what he says and how it affects your thinking and investment strategy…

Pedro

Interesting article ...and thick for a non English speaker ;-)
I am looking forward to seeing that course.
Would it be good in the meanwhile to study the basics of Fundamental Analysis or something like that? Any suggestion?
Thanks again
Pedro

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Todd Tresidder

@Pedro - I assume the course you are referring to is my upcoming investments course? If yes, your questions will be answered in future months as I get ready to release the course. It is too much to explain in a blog comment.

tony martucci

Nice article Todd,

I would like to see an article on how (in general) you invested to get where you are - and now how you invest to increase/protect those funds. I think others would find it useful also.

I appreciate your no-nonsense approach.

Thanks,
Tony

@ Tony - Thank you for adding to the conversation. I appreciate your feedback.

I will be teaching how I invest in a course titled "advanced investing for working stiffs who still have careers and can't watch the markets all day" or something similar :-) It will probably be a year or more until I get it done. It is all mapped out in file folders organized by chapter but still has to be assembled into a user friendly format. In addition, I still have another 3-6 months of building out the foundation of this web site to complete before I can focus on product development.

... all in due time...

Again, thanks for your interest and support.