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Thread: John Hussman - Hussman Funds

  1. #1

    Default John Hussman - Hussman Funds

    The more glorious this bubble becomes in hindsight, the more dismal future prospects become. The likely 12-yr nominal annual total return on a conventional passive portfolio (60% S&P 500, 30% bonds, 10% T-bills) is now down to just 0.20%. Whatever this is, it isn't "investment."

    https://twitter.com/hussmanjp/status/1215651093310513162



    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

    I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.


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  3. #2

    Default Re: John Hussman - Hussman Funds

    Maladaptive Beliefs

    John P. Hussman, Ph.D.
    President, Hussman Investment Trust

    Among the most persistent questions I hear is why we don’t just adapt to the reality that the Federal Reserve will never again “allow” the market to experience a serious decline. The problem with this view is that it rests on the premise that Federal Reserve policy supports the market in a clear-cut and mechanical way, when its effectiveness actually relies on the speculative psychology of investors.

    We can certainly concede, and indeed must concede, that replacing a mountain of interest-bearing Treasury bonds with a mountain of zero-interest base money can both manipulate and disfigure investor psychology. It’s a simple fact that once a dollar of base money has been created, someone in the economy must hold it at every moment in time, in the form of base money, until that base money is retired. Provided investors are inclined to speculate (so that they rule out the potential for meaningful capital losses), the discomfort with zero-interest base money encourages each successive holder to chase riskier securities that they imagine will provide them with a positive and higher return.

    Each time a buyer puts the base money “into” the stock market, a seller takes it right back “out” – just like a hot potato. The zero-return base money has simply changed hands. The thing that “holds the stock market up” isn’t zero-interest liquidity, at least not in any mechanical way. It’s a particularly warped form of speculative psychology that rules out the possibility of loss, regardless of how extreme valuations have become. We’ve never seen this much zero-interest base money before, but we certainly have seen the speculative psychology it relies on, and it has always ended in tears.
    https://www.hussmanfunds.com/comment/mc210912/

    mc210912a.png
    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

    I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.

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  5. #3

    Default Re: John Hussman - Hussman Funds

    The Secret Life of Fed Pivots

    I know that many of you believe that the current episode of speculative enthusiasm will persist forever –that the Fed will make it persist. We’ve already established that market returns are likely to be flat or poor even if the market achieves what Irving Fisher disastrously projected as a ‘permanently high plateau’ in 1929, and valuations remain forever above extremes never seen before last year. Investors should also consider what might happen if valuations merely touch their historical norms – even 20 years from today – and growth in fundamentals matches that of the past 20 years. The simple arithmetic implies that the S&P 500 would actually lose value on a total return basis.”

    – John P. Hussman, Ph.D., November 8, 2021
    More than two years have passed since these comments were published in 2021, and aside from a great deal of interim volatility, strikingly little has changed. It’s worth noting that despite the recent market advance, our own investment discipline, and even Treasury bills, have outpaced the S&P 500 and Nasdaq 100 during this period, with less volatility.

    In my view, the downside resolution of the recent bubble remains in its early stages, and the advance that we’ve observed, particularly in recent weeks, reflects a nearly frantic expression of pent-up “fear of missing out” on a Fed pivot that investors hope will extend the bubble.
    More: The Secret Life of Fed Pivots - Hussman Funds
    Tom
    Market Commentary | My Blog | TSP Talk Plus | |

    I am not a Registered Investment Advisor and this is not investment advice. Please do your own due diligence.

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