not yet

from John Hussman's February 23, 2009 article The Economy Needs Coordination, Not Money, From the Government . After an interesting commentary about the latest government actions and what they ought to be doing to really straighten out the financial mess, he gets down to his usual practical observations and analysis.

stocks are priced to deliver reasonable, though not outstanding probable returns for passive, long-term investors. Unfortunately, current valuations provide little support for the belief that stocks have “hit bottom” or that they could not decline considerably more. To achieve a valuation trough similar to deep historical extremes, the S&P 500 would have to approach the 500 level. If the market was to decline to that extent, I believe that stocks would be priced to achieve extraordinarily high subsequent returns.

The S&P 500 is current 743, so 500 is still a long way down from here. While he isn't saying that this will happen, based on his usually accurate analysis, it could happen. In other words, stock prices are down into the range that makes some sense, but they could go even lower.

With really low interest rates and talk of inflation, I wondered if Treasury Inflation Protected Securities (TIPS) would be appropriate here and now. From the same Hussman article...

The Strategic Total Return Fund remains primarily invested in Treasury Inflation Protected Securities, with about 12% of assets in precious metals shares, about 12% of assets in foreign currencies, and about 6% of assets in utility shares.

TIPS may be targeted to little old ladies, but it is interesting and instructive that Hussman is using them to get through this patch of economic uncertainty.
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