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Learning, Sharing, and Teaching => Investor Alley => Topic started by: 2Birds1Stone on November 12, 2018, 09:56:20 AM

Title: Hussman - The Top Is Actually In
Post by: 2Birds1Stone on November 12, 2018, 09:56:20 AM
Repost from JLF over at ERE

https://www.hussmanfunds.com/comment/mc181101/

Makes me think twice about what the heck good investments are these days =)
Title: Re: Hussman - The Top Is Actually In
Post by: UnleashHell on November 12, 2018, 10:50:30 AM
https://seekingalpha.com/article/2192193-should-people-listen-to-john-hussmans-forecasts
Title: Re: Hussman - The Top Is Actually In
Post by: HeadedWest2029 on November 12, 2018, 11:00:22 AM
For context, Hussman is a perma-bear who's been calling top since 2013 (and is hemorrhaging AUM in his hedge fund as a result).  Since January 2013 the S&P has went up 83%.  Pessimism always sounds smart, but far more money has been lost anticipating a crash.  I say this, while at the same time acknowledging a flattening yield curve, a currently high CAPE (for now...hello earnings from 10 years ago coming off the books!), and a very high average % equities (70%) in investor portfolios which all tend to be a sign of bad times up ahead.  Still, investing is about regret minimization and I'd rather invest in an index fund and watch it fall every once in a while versus beating myself up because I sat in cash for 5 years for a crash that never came.  Every time I read a bearish article that really resonates with me I try to ask myself if this just means my asset allocation is too aggressive. 
Title: Re: Hussman - The Top Is Actually In
Post by: 2Birds1Stone on November 12, 2018, 11:23:21 AM
A lot has changes since 2013.

As you mentioned, stocks are up 83% since then. A reversion to the mean, or an eventual pendulum swing to the opposite side of valuations is inevitable, now much more so than in 2013.

Don't get me wrong, I'm not going to sell a single equity......but it's something to ponder for all of these "I'm 100% stocks for life" folks who have experienced severe recency bias.
Title: Re: Hussman - The Top Is Actually In
Post by: DeepEllumStache on November 12, 2018, 11:44:34 AM
A stopped clock is right twice a day. Him and Roubini both.
Title: Re: Hussman - The Top Is Actually In
Post by: DS on November 12, 2018, 11:50:11 AM
The top is always in, always shall be. Always watching. Ever present.
Title: Hussman - The Top Is Actually In
Post by: ysette9 on November 12, 2018, 12:42:23 PM
The top is always in, always shall be. Always watching. Ever present.
The Top knows when you’re sleeping.
It knows when you’re awake.
It knows if you’ve been bad or good,
So stay invested for investment’s sake!
Title: Re: Hussman - The Top Is Actually In
Post by: UnleashHell on November 12, 2018, 02:21:43 PM
The top is always in, always shall be. Always watching. Ever present.
The Top knows when you’re sleeping.
It knows when you’re awake.
It knows if you’ve been bad or good,
So stay invested for investment’s sake!


ITS NOT EVEN THANKSGIVING YET!!!!

oh. ok.
Title: Re: Hussman - The Top Is Actually In
Post by: Exflyboy on November 12, 2018, 02:27:11 PM
For me I have about 8 years of yearly expenditure in bonds.. not counting my rent or future pension.. Then it would be 13 years.

So I am thinking this might be a bit too conservative, even though this represents an 80:20 split stocks:bonds.

If we get the armageddon meltdown I might move 30 or 40% of my bonds into stocks.. because.. well why not?
Title: Re: Hussman - The Top Is Actually In
Post by: AccidentalMiser on November 12, 2018, 03:03:31 PM
:eyeroll:
Title: Re: Hussman - The Top Is Actually In
Post by: uwp on November 12, 2018, 04:08:35 PM
Here is a chart of Hussman's "Strategic Growth" fund (with dividends reinvested) since the last market top (Fall 2007) compared to S&P 500 total return:

(https://i.imgur.com/7Sqh5bu.png)

Maybe he is right this time.  But he has been a whole lotta wrong for the past decade.

Remember, if you are going to market time, you have to be right at the top, then right again at the bottom.
Title: Re: Hussman - The Top Is Actually In
Post by: aboatguy on November 12, 2018, 06:21:44 PM
Santa Top is not yet in!
(https://www.thegaitpost.com/wp-content/uploads/santa-top.jpeg)
Title: Re: Hussman - The Top Is Actually In
Post by: AccidentalMiser on November 12, 2018, 07:01:11 PM
Here is a chart of Hussman's "Strategic Growth" fund (with dividends reinvested) since the last market top (Fall 2007) compared to S&P 500 total return:

(https://i.imgur.com/7Sqh5bu.png)

Maybe he is right this time.  But he has been a whole lotta wrong for the past decade.

Remember, if you are going to market time, you have to be right at the top, then right again at the bottom.

Great chart.  I do love a good fact!
Title: Re: Hussman - The Top Is Actually In
Post by: Radagast on November 12, 2018, 10:02:10 PM
(https://i.imgur.com/7Sqh5bu.png)
Holy crap. That is hilarious.
Title: Re: Hussman - The Top Is Actually In
Post by: MustacheAndaHalf on November 13, 2018, 07:40:57 AM
Wow, Hussman's fund makes me feel a bit better about my momentum experiment.  While I earned just +24% from Feb 2016 to Feb 2018, Hussman was losing -23% around then (while the S&P 500 gained +36%).

How does someone trail the market by -60% in two years and still have an influential voice?
Title: Re: Hussman - The Top Is Actually In
Post by: I'm a red panda on November 13, 2018, 07:43:22 AM
Like, it's really really in?  In 2050, the market will be below where it is today?  In 2090 it still will be?

This is truly shocking news....  top isn't in. 
Title: Re: Hussman - The Top Is Actually In
Post by: UnleashHell on November 13, 2018, 08:25:53 AM
Like, it's really really in?  In 2050, the market will be below where it is today?  In 2090 it still will be?

This is truly shocking news....  top isn't in.

you are denial.

There is no denying the top.


you need to write out the entire thread one hundred times so that you get it. tsk.
Title: Re: Hussman - The Top Is Actually In
Post by: Mississippi Mudstache on November 13, 2018, 09:39:43 AM
Here is a chart of Hussman's "Strategic Growth" fund (with dividends reinvested) since the last market top (Fall 2007) compared to S&P 500 total return:

(https://i.imgur.com/7Sqh5bu.png)

Maybe he is right this time.  But he has been a whole lotta wrong for the past decade.

Remember, if you are going to market time, you have to be right at the top, then right again at the bottom.

Some "strategy" he's got there. Does it come with negative dividends, too?
Title: Re: Hussman - The Top Is Actually In
Post by: I'm a red panda on November 13, 2018, 10:03:58 AM
Like, it's really really in?  In 2050, the market will be below where it is today?  In 2090 it still will be?

This is truly shocking news....  top isn't in.

you are denial.

There is no denying the top.


you need to write out the entire thread one hundred times so that you get it. tsk.

Sorry... the top is in. Should I sell all my stocks after the next dip to ensure I don't lose too much?
Title: Re: Hussman - The Top Is Actually In
Post by: UnleashHell on November 13, 2018, 10:46:41 AM
Like, it's really really in?  In 2050, the market will be below where it is today?  In 2090 it still will be?

This is truly shocking news....  top isn't in.

you are denial.

There is no denying the top.


you need to write out the entire thread one hundred times so that you get it. tsk.

Sorry... the top is in. Should I sell all my stocks after the next dip to ensure I don't lose too much?

Only if you can sell on margin............
Title: Re: Hussman - The Top Is Actually In
Post by: DS on November 13, 2018, 11:04:29 AM
Um, we already have a dedicated thread to worship the Top.
Title: Re: Hussman - The Top Is Actually In
Post by: UnleashHell on November 13, 2018, 11:19:48 AM
Um, we already have a dedicated thread to worship the Top.

yup.


and this particular crappy opinion article was posted there as well.

its just a brief parallel thread - soon to die and disappear...
Title: Re: Hussman - The Top Is Actually In
Post by: G-dog on November 13, 2018, 11:20:21 AM
Um, we already have a dedicated thread to worship the Top.

yup.


and this particular crappy opinion article was posted there as well.

its just a brief parallel thread - soon to die and disappear...

Like the top
Title: Re: Hussman - The Top Is Actually In
Post by: uwp on November 13, 2018, 11:22:05 AM
How does someone trail the market by -60% in two years and still have an influential voice?

You have to start by looking smart. 
And to Hussman's credit, here is that same fund from inception(2000) to S&P 500 peak(2007):

(https://i.imgur.com/9b5kzil.png)

That will buy you some leeway when you underperform.
Title: Re: Hussman - The Top Is Actually In
Post by: MustacheAndaHalf on November 14, 2018, 03:18:37 AM
How does someone trail the market by -60% in two years and still have an influential voice?
And to Hussman's credit, here is that same fund from inception(2000) to S&P 500 peak(2007):
That's interesting.  It looks like Hussman beat the S&P 500 for ~8 years, but then after the financial crisis of 2008 something changed and the fund just went into steady decline.

The picture is much less flattering if you compare Hussman's Strategic Growth fund to "Vanguard Growth ETF" (VUG).  Hussman's fund never pulled ahead of VUG, even in it's early years.
Title: Re: Hussman - The Top Is Actually In
Post by: uwp on November 14, 2018, 03:49:53 PM
The picture is much less flattering if you compare Hussman's Strategic Growth fund to "Vanguard Growth ETF" (VUG).  Hussman's fund never pulled ahead of VUG, even in it's early years.

?

The Vanguard Growth ETF wasn't created until 2004, so that may be why you "missed" VUG's underperformance from 2000-2003.  If you compare Hussman with the virtually identical index fund which was open (VIGAX), Hussman beat that by even more than the S&P in those early years.  Growth stocks were not the place to be from 2000-2002. 

Full picture:

(https://i.imgur.com/jpPnehL.png)

None of this is to champion Hussman or his funds.  The man has been yelling at the clouds for almost a decade.

It's funny looking at that graph; HSGFX got almost exactly back to where it began!
Title: Re: Hussman - The Top Is Actually In
Post by: Telecaster on November 14, 2018, 04:34:04 PM
Wow, Hussman's fund makes me feel a bit better about my momentum experiment.  While I earned just +24% from Feb 2016 to Feb 2018, Hussman was losing -23% around then (while the S&P 500 gained +36%).

How does someone trail the market by -60% in two years and still have an influential voice?

Hussman correctly anticipated the Tech Bubble (which a lot of people did, btw) and made a ton of money with short positions when the whole thing imploded.  Following that, there was a long period of doldrums when stocks didn't do much, and Hussman didn't do too bad  in that time period too, just because he had lots of bonds and hedges.  If you invested with Hussman (HSGFX) right at the beginning (2000) and never added another dime, you in fact would still been ahead of the broader markets for well into the next decade.  If you leave it at that, it doesn't sound too bad.  But if you just re-adjust the start dates a little bit (say, 2004 to present), then the S&P 500 investor completely blows him away.  Or if you are making period additions to your portfolio, then Hussman didn't do too well either.     

Thing is, when you read his stuff, Hussman sounds really smart.  He just can't translate that into investment performance. 
Title: Re: Hussman - The Top Is Actually In
Post by: aspiringnomad on November 18, 2018, 12:09:35 AM
Here is a chart of Hussman's "Strategic Growth" fund (with dividends reinvested) since the last market top (Fall 2007) compared to S&P 500 total return:

(https://i.imgur.com/7Sqh5bu.png)

Maybe he is right this time.  But he has been a whole lotta wrong for the past decade.

Remember, if you are going to market time, you have to be right at the top, then right again at the bottom.

Some "strategy" he's got there. Does it come with negative dividends, too?

In Soviet Hussman, dividends receive you!
Title: Re: Hussman - The Top Is Actually In
Post by: Mighty-Dollar on November 19, 2018, 04:43:53 PM
Imagine that! I get advance warning of an impending stock crash! Who knew investing was this easy!
For every doom & gloomer there's an optimist. Unfortunately only the doom & gloomers get attention in the news.
Title: Re: Hussman - The Top Is Actually In
Post by: 2Birds1Stone on November 21, 2018, 07:25:52 AM
A stopped clock is right twice a day. Him and Roubini both.

Maybe this is one of those times =D
Title: Re: Hussman - The Top Is Actually In
Post by: HeadedWest2029 on November 21, 2018, 07:40:07 AM
I mean, I hope so since I'm in the accumulation phase.  I know psychologically when markets fall I always feel like they're going to keep falling so even if I sold I'd quickly fall in love with cash and would mistime the jump back in.  We always extrapolate out recent events far into the future.  BTW, I agree with your earlier post that a lot of the younger FIRE folks who started after the recession are probably in for a rude awakening if they are 100% in stocks and hoping to "barista" FIRE.  I'm glad I lived through the great recession with at least some skin in the game to know what that feels like
Title: Re: Hussman - The Top Is Actually In
Post by: DeepEllumStache on November 21, 2018, 09:00:23 AM
A stopped clock is right twice a day. Him and Roubini both.

Maybe this is one of those times =D

Also functions as a self fulfilling prophecy if you scare enough people into pulling their money out of the market.
Title: Re: Hussman - The Top Is Actually In
Post by: Steeze on November 23, 2018, 07:27:05 AM
A stopped clock is right twice a day. Him and Roubini both.

Maybe this is one of those times =D

Also functions as a self fulfilling prophecy if you scare enough people into pulling their money out of the market.

Would it not behoove those in the accumulation phase to all start blogs expressing a perma-bear narrative? Attempting to shift sentiment toward the negative while secretly buying as many shares as possible. Then, when in retirement do the exact opposite? Seems like a logical strategy.
Title: Re: Hussman - The Top Is Actually In
Post by: 2Birds1Stone on November 23, 2018, 07:37:51 AM
Presto! This is why "The Top Is In" thread was created.
Title: Re: Hussman - The Top Is Actually In
Post by: 2Birds1Stone on December 19, 2018, 02:17:13 PM
Well, VTI is down 10%+......with no bottom in sight.

Broken clock? Or more to it?
Title: Re: Hussman - The Top Is Actually In
Post by: Davnasty on December 19, 2018, 02:26:37 PM
A stopped clock is right twice a day. Him and Roubini both.

Maybe this is one of those times =D

Also functions as a self fulfilling prophecy if you scare enough people into pulling their money out of the market.

Would it not behoove those in the accumulation phase to all start blogs expressing a perma-bear narrative? Attempting to shift sentiment toward the negative while secretly buying as many shares as possible. Then, when in retirement do the exact opposite? Seems like a logical strategy.

Is this the reverse of a pump & dump? Perhaps a drain & gain?
Title: Re: Hussman - The Top Is Actually In
Post by: Eric on December 19, 2018, 02:30:34 PM
Well, VTI is down 10%+......with no bottom in sight.

Broken clock? Or more to it?

Broken clock still.  Predicting something that everyone knows is coming, way before it actually comes, doesn't make you "right" when it comes.  It's like he predicted the first snowfall in June.  And then every month after that.  When it snows in December, would you say "See!  He knew it was going to snow!!"?
Title: Re: Hussman - The Top Is Actually In
Post by: soccerluvof4 on December 20, 2018, 07:45:46 AM
Waiting for that thread " The bottom is in" ha...ugh
Title: Re: Hussman - The Top Is Actually In
Post by: aspiringnomad on December 26, 2019, 06:57:22 PM
Given that it's been a year, I thought it might be fun to update this thread with Mr. Hussman's performance in that time. And...[drumroll, please]...the Hussman Strategic Growth Fund is down 20% in that span while the S&P is up 31%. This despite his claiming last year at this time that his investors should:

"understand  the  adaptation  we  introduced  in  late-2017.  In  my  view,  it  addresses  the  central  feature  of  the  financial  markets  that  made  our  experience  between  2009  and  2017  so  different  from  our  experience  in  complete  market cycles prior to 2009, and different from what we expect in future cycles – even if extraordinary monetary and fiscal interventions become the norm."

In other words, he supposedly fixed what was wrong with his investment approach. And yet, in the past year his investors lost a fifth of their money while passive indexers gained nearly a third of theirs. Gotta wonder how this guy still has any assets under management.

More recently, he placed some of the blame for his fund's awful performance on passive indexing, sharing this deep thought:

"...one  can  visualize  an  efficient  market  as  a  sheep  standing on a nickel. If there are enough sheepdogs around, constantly ensuring that the sheep doesn’t stray, then yes, the sheep will keep standing on the nickel. But if the sheepdogs simply assume that sheep always stand on nickels (the equivalent of asserting that “low-cost index investing is always efficient”), the sheep may not even stay in the neighborhood. That is the situation that the performance-chasing popularity of index investing has created today."

In addition to the negative returns, people pay up to 2% a year for these kinds of insights and results.
Title: Re: Hussman - The Top Is Actually In
Post by: Phenix on December 26, 2019, 09:05:29 PM
Hussman investors reading his newsletters:
(https://media.giphy.com/media/PoMaeOvC4SHUQ/giphy.gif)
Title: Re: Hussman - The Top Is Actually In
Post by: fattest_foot on December 26, 2019, 09:41:16 PM
His take on passive investing seems backwards. If "everyone" is passive investing, he should be able to clean up by actively trading on us blind idiots.

That he can't is a double indictment on his strategy.
Title: Re: Hussman - The Top Is Actually In
Post by: harvestbook on December 27, 2019, 06:36:47 AM
A reversion to the mean, or an eventual pendulum swing to the opposite side of valuations is inevitable, now much more so than in 2013.


What if this IS the reversion to the mean from 2000-2010?
What if this is just what bull markets do?
What if everything is normal?
Title: Re: Hussman - The Top Is Actually In
Post by: MissNancyPryor on December 27, 2019, 07:16:04 AM
Media rarely holds anyone to account for their dopey predictions.  I guess if they did so they would not have any counterpoints to come on the air and they would fail to get the clicks online with panic news.  Fear sells.   

It would be immensely refreshing to have a complete score card of analysts and their stock upgrade/downgrade hits and misses, with the losers told to take the bench until they show they can do better than getting even half of them correct.  I know investors can look this up for themselves but I am suggesting that every time someone like Louise Yamada comes on the air they are required to do a quick rundown disclosure of how incredibly, repeatedly, stupidly, ridiculously wrong she has been.  Just like when they declare if they own the stocks they tout they would have to admit how many times they completely missed the mark.           
Title: Re: Hussman - The Top Is Actually In
Post by: aboatguy on December 27, 2019, 09:34:58 AM
What I learned from the article and the Propectus was his strategic growth fund needed some better strategery *


*strategery.
.

[strəˈtējərē]







NOUN


US

informal
.


strategy (chiefly used ironically or derisively).

"maybe this is his brilliant strategery—drive them so crazy that they act rashly!" ·
[more]



Long live the TOP may it forever reign!
Title: Re: Hussman - The Top Is Actually In
Post by: Panly on December 27, 2019, 11:21:41 AM

Last Xmas there was a lot less sneering in this thread.

I wonder why.

Title: Re: Hussman - The Top Is Actually In
Post by: UnleashHell on December 27, 2019, 02:18:56 PM

Last Xmas there was a lot less sneering in this thread.

I wonder why.

and yet.... there wasn't...
Title: Re: Hussman - The Top Is Actually In
Post by: Panly on December 28, 2019, 01:46:12 AM

I really wonder why there are so many people who are truly excited that their dollars get them less and less investments.

But, hey, there's a lot I don't understand.
Title: Re: Hussman - The Top Is Actually In
Post by: Maenad on December 28, 2019, 08:29:17 AM

Last Xmas there was a lot less sneering in this thread.

I wonder why.

and yet.... there wasn't...

I know, right? Last year there was this:

Broken clock still.  Predicting something that everyone knows is coming, way before it actually comes, doesn't make you "right" when it comes.  It's like he predicted the first snowfall in June.  And then every month after that.  When it snows in December, would you say "See!  He knew it was going to snow!!"?

I'm getting tired of this fallacy of the excluded middle that a few people here keep throwing around. Just because we snark about the predictive powers of pundits doesn't mean we're idiots who think the market will go up every day forever and ever. It just means that we realize that even the "experts" are merely reading tea leaves, and the number of people on this planet who can accurately predict the market is vanishingly small. And it sure as hell isn't anyone here. It's people at the investment banks with much greater quantity and quality of data than us little people ever see.
Title: Re: Hussman - The Top Is Actually In
Post by: Panly on December 28, 2019, 09:43:02 AM

Last Xmas there was a lot less sneering in this thread.

I wonder why.

and yet.... there wasn't...

I know, right? Last year there was this:

Broken clock still.  Predicting something that everyone knows is coming, way before it actually comes, doesn't make you "right" when it comes.  It's like he predicted the first snowfall in June.  And then every month after that.  When it snows in December, would you say "See!  He knew it was going to snow!!"?

I'm getting tired of this fallacy of the excluded middle that a few people here keep throwing around. Just because we snark about the predictive powers of pundits doesn't mean we're idiots who think the market will go up every day forever and ever.


Most here surely feel entitled to that result.


Even while they're in the accumulating phase.

And that, is indeed quite idiotic.




Title: Re: Hussman - The Top Is Actually In
Post by: aspiringnomad on December 28, 2019, 11:06:29 AM
Most here surely feel entitled to that result.


Even while they're in the accumulating phase.

And that, is indeed quite idiotic.

I think you're missing the point, which is that it's much better to ignore self-styled experts and continue indexing than it is to pay those expert 2% to underperform the market by 50 percentage points in one year. Given the number of threads in which market timing comes up here, additional reinforcement doesn't hurt. Btw, you seem quite comfortable sneering.
Title: Re: Hussman - The Top Is Actually In
Post by: FIRE 20/20 on December 28, 2019, 09:51:12 PM

Last Xmas there was a lot less sneering in this thread.

I wonder why.

All the sneering was over in the "Top is in" thread.  https://forum.mrmoneymustache.com/investor-alley/top-is-in/3950/
On this thread most people were just ignoring a perpetually wrong person's prediction by not posting.