One of our favorite mainstream sources for rational and clear-eyed market analysis is John Hussman of Hussman Funds. His weekly market comment gives a great overview of the major factors affecting markets, and he never seems to fall prey to the breathless paranoia or ideological cheerleading that is characteristic of so much financial commentary these days.

This week’s comment, “A Who’s Who of Awful Times to Invest,” discusses some of the key features of previous market downturns, and shows how today’s markets bear striking similarities to those awful prior periods. Hussman concludes with this:

As of last week, the Market Climate for stocks was characterized by unusually unfavorable valuations, extremely overbought conditions, tenuously favorable market action on the basis of market internals, and generally upward interest rate pressures. The current overvalued, overbought, overbullish combination of investment conditions has historically been associated with market returns below Treasury bill yields, on average. We need not forecast where the market will move in this particular instance – that average return below T-bill yields is enough to hold us to a defensive position.

Overvalued, overbought, and overbullish. Sounds pretty bearish, right? Not exactly - his whole point is that if the current market environment doesn’t justify an expectation that equities - with all their inherent risk - won’t outperform risk-free Treasuries, then it doesn’t make sense to put new money into the markets. One doesn’t have to call a market top or become a furry, clawed omnivore to recognize when market situations present too much risk. This is not a perspective you will ever hear on CNBC (not without it being ridiculed, that is).

Although we wouldn’t compare ourselves to John Hussman, we like to think or ourselves as pursuing the same sort of strategy. Iron condors certainly have their own unique set of virtues and vices, but on the most basic level we try to ignore the bullish cheerleaders, console the perpetual bears (not that there are many of them left), and take in profits from the sideways action caused by everyone else’s confusion.

Since we switched to ETF underlying instruments, the average return of our trades has been 33.5%. We’re not going to help you get rich quick or retire young, or live a life of sailboats and martinis and red sportscars. And you know why? Because all the people who make those kinds of promises aren’t being honest (you know the ones: “turn $5,000 into $1 million!!!” and “generate 2122% gains in 90 days!!!”).

What we do promise, and what we’d like to see more of in the finance industry, is an unbiased look at the markets, a strategy for making consistent, risk-aware, and realistic profits, and (we’re particularly insistent on this last point) personal attention and investor education, rather than just a lot of shouted stock picks (“BuyBuyBuy!”) and paternalistic “advice.” Hussman makes that kind of effort, as does Barry Ritholtz, and we’d like to count ourselves among those ranks.