Fund Manager Hussman Stands By His “Permabear” Strategy

The mission of the Hussman Strategic Growth Fund is to “outperform the broad stock market over complete market cycles…but seeks to limit its downside risk using derivatives, such as options on broad market indexes,” according to a recent article in The Wall Street Journal. John Hussman, manager of the fund, was successful in insulating investors to some degree earlier in the 2000s, the article says, “but it hasn’t helped through the long bull market.” Still,… Read More

Hussman on High Plateaus and Poor Precedents

John P. Hussman of Hussman Funds examines permanently high plateaus in the market and their poor precedents in  a recent installment of Hussman Funds’ Weekly Market Comment. He predicts a market retreat over the completion of the current market cycle, and estimates small total returns  and possible negative real returns. However, Hussman has some good news. “The most favorable market return/risk profile we identify is associated with a material retreat in market valuations that is then joined by an early improvement in our measures… Read More

Why Hussman Remains Bearish

Fund manager John Hussman has remained one of the staunchest bears in the stock market. And in a recent presentation (a tip of the hat to Business Insider for posting the presentation), he lays out his case for why the economy and market are not in as good shape as many believe. Hussman says the Federal Reserve’s policies have created “an ocean of zero-interest monetary base” that “encourages a speculative reach for yield”. It has… Read More

Hussman: Don’t Believe the Valuation Numbers

Fund manager John Hussman remains quite bearish on the market, saying that stocks are showing signs of being in the “exhaustion” part of a bull market. “We presently have an overvalued, overbought (intermediate-term), overbullish market featuring a variety of syndromes that have typically appeared in the ‘exhaustion’ part of the market cycle: elevated valuation multiples on normalized earnings, emerging divergences in market internals, an increasingly tepid economic backdrop, market prices near the upper Bollinger bands… Read More

Hussman Talks “Extreme Strains”, and Momentum Investing

Fund manager John Hussman says he sees “extreme strains” ahead that many investors are underestimating. In an excerpt from his most recent market commentary posted on Seeking Alpha, Hussman talks about how he missed some 2009 and 2010 upside “as we worked to make our approach robust to Depression-era outcomes”. Hussman says he thinks that will prove to be a good thing in the long run. “From a fiduciary perspective, I continue to believe that… Read More

Hussman: Recession Is Here

Fund manager John Hussman, whose funds have struggled in recent years but have good long-term track records, says he thinks the economy has entered recession. “I noted two weeks ago that the leading evidence pointed to a further weakening in employment, with an abrupt dropoff in industrial production and new orders,” Hussman writes in his latest market commentary. He says there has been a “litany of awful figures” since then. “U.S. manufacturing new orders and… Read More

Hussman: Profit Margins Skewing Valuations

John Hussman, whose funds had strong long-term track records before getting hit hard the past few years, says those who contend stocks are cheap are way off base. “I can’t emphasize enough how badly standard P/E metrics are being distorted by record (but reliably cyclical) profit margins, which remain about 50-70% above historical norms,” Hussman writes in his latest market commentary. Hussman says valuations are actually more elevated than they were before the 2008 market… Read More

Hussman: It’s An Awful Time To Invest

Last week, we noted how The Wall Street Journal’s Jason Zweig says that we’re in the best time ever for individual investors, thanks largely to the way fees have declined and the ease of obtaining information has increased over the years. This week, however, John Hussman argues that, in terms of the specifics of the current market conditions, it’s one of the worst times ever to invest. “This is not a runaway bull market,” Hussman,… Read More

Hussman: Short-Term Conditions “Hard-Negative”

Fund manager John Hussman says the current stock market condition “warrants unusual concern,” and is playing defense with his portfolio. “Based on a wide variety of evidence and its typical market implications over an ensemble of dozens of subsets of historical data, the expected return/risk profile of the stock market has shifted to hard-negative,” Hussman writes in his weekly market commentary. “This places us in a tightly defensive position.” Hussman says conditions could change rather… Read More