From Hussman’s The Endgame is Forced Liquidation
Rule o’ Thumb: When the cover of a major financial magazine features a cartoon of a bull leaping through the air on a pogo stick, it’s probably about time to cash in the chips.
Dr. Hussman goes on to warn that margin debt is nearing its 2007 high which is in turn adding fuel to the bull market fire. A bull market built on borrowed money has a tendency to turn on a dime and force liquidation of leveraged positions – and that, in Hussman’s eyes, is the end game.
Editor’s note: I am going to make a concerted effort to provide some sources other than Hussman as this blog is starting to feel like his fan club. No promises though – lately no one’s arguments have really resonated with me and I’m not going to just repost Bill Gross’ tweets.