'..The next few years are likely to be difficult for those investors who cannot actually tolerate a 50-60% portfolio loss..'

'..Investors who would not be able to maintain a disciplined passive investment strategy over the course of such a loss are encouraged to review their investment exposure based on their actual investment horizon and risk-tolerance.'

<blockquote>'Stocks are a claim on a stream of future cash flows that will be delivered to investors over time. Historically, the most reliable “sufficient statistic” for those cash flows for the U.S. stock market as a whole is not next year’s forecast of S&P 500 operating earnings, but instead, the gross value added produced by U.S. corporations. The comparative reliability is not even close. The next few years are likely to be difficult for those investors who cannot actually tolerate a 50-60% portfolio loss on passive equity investments. Investors who would not be able to maintain a disciplined passive investment strategy over the course of such a loss are encouraged to review their investment exposure based on their actual investment horizon and risk-tolerance.'

- John P. Hussman, Ph.D., Dissolving Musical Chairs, March 27, 2017</blockquote>


Context

<blockquote>'..the amount of leverage and excess that has accumulated in bond and Credit markets..'</blockquote>