Baron Rothschild, by John Hussman
Submitted by Liberty Valley on Tue, 2007-02-13 13:13.
As usual, no forecasts.
Despite my fairly pointed concern about risks here, it's very important not to establish a specific forecast or time frame for the direction of the market. It is true that we currently observe a narrow set of conditions that has previously been followed by abrupt market declines in relatively short order, and I've felt a responsibility to wave my arms around to emphasize that risk in recent weeks. But I cannot emphasize enough that our current defensive position is not driven by the forecast of an abrupt market decline – it is based on a more general set of conditions under which the stock market has underperformed Treasury bills, on average.
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For the complete article see http://www.hussmanfunds.com/wmc/wmc070212.htm
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Our comment:
The first part of this article summarizes so well the concept of defensive investing. This is exactly the strategy we try to follow with our investments at Liberty Valley.
defensive
Given that we have had 20% returns over the last 3 years, shouldn't we call out Baron Rothschild on all our equity positions NOW and reallocate our assets? Our gains will come down sharply if we suffer a 20% decline in the next year or so?
Is it worth pulling out early on our equity positions (except metals?