John Hussman

[MachineGhost]

I can't possibly be alone in wanting to choke this guy to death.  I wish I had never heard of him, for now he has an outpost inside my head that is impossible to uproot.  His logic and arguments are almost unassailable, but his results are ridiculously absurd.  If he's been a true perma-bear since 1992 and didn't adapt his thinking and approach upon becoming a money manager in 2001, I can't think of a greater comical farce on Wall Street short of Bernie Madoff.  This guy is leagues ahead of the perma-bear morons like Prechter, Schiff, Weiss, Granville, et al..

Maybe his outlook is truly "in the long run".   All I can say is: WOW!  If I'm going to be hoodwinked, it better be by someone of this caliber.

[Reub]

Yes, he is certainly very convincing and his facts and charts are indisputable. However, he has been totally wrong, but in a logical, unimpeachable sort of way.

[Ad Orientem]

For those of us who haven't been paying attention do you have a link or maybe a short summary of his outrageous prognostications?

[cnh]

For those of us who haven't been paying attention do you have a link or maybe a short summary of his outrageous prognostications?

His latest weekly market comment: http://www.hussmanfunds.com/wmc/wmc130311.htm.

[MediumTex]

Yes, it's impossible to find flaws in his reasoning.  He's a very smart and insightful man.

Reality just has a way of unfolding in an unreasonable way, I guess.

[Libertarian666]

"Markets can remain irrational a lot longer than you and I can remain solvent."

I can remain solvent indefinitely, given that I use no margin. :-)
But that doesn't make it any less absurd that gold is still below $2000, given the insane money printing going on.

[Kshartle]

This guy is leagues ahead of the perma-bear morons like Prechter, Schiff, Weiss, Granville, et al..

Schiff isn't a perma-bear. He's been bullish on stocks for as long as I've been listening to him, still is. He was bearish on housing and the US economy in 2004-2005 and has been bearish on the dollar.

[jsp326]

This guy is leagues ahead of the perma-bear morons like Prechter, Schiff, Weiss, Granville, et al..

Schiff isn't a perma-bear. He's been bullish on stocks for as long as I've been listening to him, still is. He was bearish on housing and the US economy in 2004-2005 and has been bearish on the dollar.

He's much more bullish on emerging market stocks than U.S. stocks.  He predicted something like the 2008 meltdown back in 2005-2006, but he thought international equities would fare much better than they did.

His critics used this against him, but at least (a) he got the financial crisis right and (b) his gold and foreign stock portfolio recovered faster/better than U.S. stocks.

I haven't listed to his podcast in awhile, but when I did, I never considered him a U.S. stock bull.  I believe he said that stocks and real estate may go up along with inflation, but relative to other investments, he didn't think they were great choices.  And he  believes the worst of the financial crisis hasn't hit yet (which certainly isn't bullish for stocks).

[Kshartle]

Yes that's correct. He has not been recomending going to cash or going short like some of the stock-market bears. He has said he thinks US equities will continue to rise as well, just not as robustly as some other stock markets that are less dependant on an overleveraged US consumer. Instead of cash and bonds to offset the stocks hold gold and possibly some silver, up to 30% in the portfolio. Obviously this is more volitile than PP by far but has certainly provided higher returns. For all the talk about the record highs in the DOW gold and silver have more than doubled since the previous DOW high. Stocks would have some dividends over that period to help out of course.

Not the super-smooth ride many are looking for though......

[MachineGhost]

From what I can tell, Hussman apparantly called the bottom in stocks in the early 90's, but he was bearish starting in 1994 and all the way up and only being vindicated in 2000-2002.  To his credit, he did go long an overvalued market at the bottom in 2003 (just as the early 1990's was) -- but to me that just means he added technical indicators to his chronically wrong permabear fundamentalism of the 90's, i.e. he adapted after the fact.  If he had done the same in late 2008/early 2009 instead of freezing and freaking out about Depression era outcomes, I estimate his stock fund would now be down only about -13% instead of about -33%.  While he waxes poetic about how damaging a 50% drawdown is to recover in the normal investing context, he ignores how much damage he has incurred to his fund that may be impossible to recover in the next downleg, as bear markets only average a 39% decline in secular bears.  But I suppose it still beats losing another 66% if 2008/2009 had not been a bottom...  It looks like it is going to take both another peak-to-trough downleg and probably half of another trough-to-peak upleg just to recover the losses.  This is extremely "in the long run"!!!

I still maintain that he should have considered Depression era outcomes in the model before he first solicited any investment funds.  Maybe there's a class action lawsuit waiting to happen?  There is a difference in fidicuiary duty in being part of the "relative" Wall Street institutional lemmings where misery hides behind fellow company vs claiming to be an "absolute" breed apart and failing at it.

BTW, in comparison to straight up SPY and TLT, they are up about 50%-60% each since 2007 versus the -33% in his growth fund and barely above break even in his bond fund.  I can't understand how he could screw up the bond fond as well.  I can't get over the feeling there has to be a calculation mistake somehwere.

[blackomen]

I used to follow his weekly commentaries religously when I opened my first brokerage account while still in school several years back (right before the crash)..

His insights are very clear but when you look at the performance of his fund, it doesn't reflect his academic superiority.  Guess this is where the phrase "ivory tower academic" comes from..

[Reub]

"Maybe there's a class action lawsuit waiting to happen?"

I wouldn't go that far. As Harry Browne would have told you, people make incorrect decisions about investments every day. Hence, the Permanent Portfolio!

[MachineGhost]

Mr. Hussman, repeat after me: "I am an idiot that can be easily beat by wiggly lines on a chart."

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