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 ensuring the ability to withstand extreme strains was necessary,” he says. “From a practical perspective, I continue to believe that the ability to withstand extreme […]

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 export orders plunging from expansion to contraction, Eurozone new export orders plunging (only orders from Greece fell at a faster rate than those of Germany), […]

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 plunge when margins are accounted for. Stocks are priced to return just 4.5% annually over the next decade, he says. Hussman also talks about why […]

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, whose funds have solid long-term track records but have stumbled in recent years, writes in his latest market commentary. “Rather, it is a market that […]

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 quickly, but right now he sees “conditions that have often produced abrupt crash-like plunges. This combination of evidence includes elevated valuations, overbullish sentiment, market internals […]