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Famed Investor Predicts Historic Market Drop

edited May 2017 in Off-Topic
That's the view of John Hussman, president of the mutual fund Hussman Investment Trust, seasoned investor, and Stanford University economics PhD. Hussman says you can expect the S&P 500 to return no more than 1% on average over the next decade. Sooner than that, he predicts, the stock market may plunge as much as 60%.

Hussman, who once managed a nearly $7 billion mutual fund, calls the current environment “the most broadly overvalued moment in market history." And he says investors shouldn't expect much in returns from stocks or bonds.

http://fortune.com/2017/03/09/stock-market-sell-bubble/

Comments

  • Hussman has been predicting a market plunge for many years. Eventually, he will may proven "right" to some degree. But he has been wrong 90% of the time. For once, however, he has a growing chorus behind him.
  • edited May 2017
    @hank
    Don't know. The way "things" are running in D.C.-land, the only thing I will predict is that there won't be much action on a health or tax bill in the near future.
    Apparently, the big money doesn't really care about other circumstances as long as the financial institutions appear to be above the safe water zone and/or will be covered in another crisis situation.
  • edited May 2017
    Hi Catch. Yep - Seems like the ajenda - whatever it was supposed to be - is on the back burner. Three months ago I actually believed they'd be hard at work building the great wall by now.

    The markets? Don't know. But we got a ton in cash and short-term paper. What's that old song - Ya can't roller-skate through a buffalo herd ?

    Regards
  • Say what??

    Buffalo??
  • @MFO Members: Oh ! please, its only John being John. Like a stopped clock, John is right twice a century. The time you need to worry is when John becomes a bull.
    Regards,
    Ted

    P.S. HSGFX 1-15 year performance in the 100 percentile. That a boy John !
    http://performance.morningstar.com/fund/performance-return.action?t=HSGFX&region=usa&culture=en_US
  • "Famed" investor? He "called" the crash of 2000? He was one of many who "called" that, but it was pretty clear to even an average investor the market way way out of whack then. The current market has no similarity to that market. Yes, there will be a crash at some point...next month, year, decade...but not because this "famed" Stanford PhD say it will happen. Interesting note that he "once managed $7 billion". Ted's point is well taken, although I am not sure the "famed" investor is capable of being a real bull.
  • edited May 2017
    Hussman taught me I should use ANALysis and not Analysis. There is some statement by someone regarding markets can stay irrational longer than you can remain solvent. If Hussman did not have a PhD, he would heed that.

    Your thesis can be correct, but unless everyone else agrees, market is not going to move in the direction you think it should. Hussman's real problem is implementation. He can't even hedge properly. I mean he hedges worse than man off the street.

    Every year, I keep selling little not wanting to sell it all, thinking as soon as I sell he will start outperforming. Oh well, at least HSTRX has not done too bad.

    PS - Notice "famed investor". I was thinking Hussman I can invite to dinner but not Bill Miller. Now I wonder...
  • edited May 2017
    Old_Joe said:

    Say what??
    Buffalo??

    It ain't the buffalo OJ. It's all that stuff they leave behind that makes skating through it difficult.
    Ted said:

    @MFO Members: Oh ! please, HSGFX 1-15 year performance in the 100 percentile.

    @Ted - You can't do any better than 100% can you?
    BobC said:

    "Famed" investor?

    Agree with Bob. Infamous Investor would be more appropriate.
  • Famous for being wrong. One day he'll be right but since his investors have lost 45% of their principal over the past ten years, while the broad market has appreciated by over 100%, it won't help them much. The fact that he continues to make 'news' says something about how desperate some financial journalists must be.
  • sfnative said:

    Famous for being wrong. One day he'll be right but since his investors have lost 45% of their principal over the past ten years, while the broad market has appreciated by over 100%, it won't help them much. The fact that he continues to make 'news' says something about how desperate some financial journalists must be.

    Hussman is truly a mistake I have to own. I let myself be deceived. No one had a hand in it. My pride actually has taken a bigger hit than my portfolio. I'm just glad HSTRX worked out reasonably or I would have had a double whammy. I always treated both funds as a single position.
  • edited May 2017
    VF - I don't think you've lived until you've ridden at least one fund into the ground! My poison of choice was Oppenhiemer's QRAAX which they finally took out to pasture and shot - leaving me the crumbs.

    Thanks for sharing. Enjoy your posts. Good luck.
  • edited May 2017
    The problem with long term investing in picture. Please tell me when I should have sold. I have been selling a bit every year for last 3 years for taking tax losses.

    hsgfx_long_term
  • Please tell me when I should have sold.

    As the Geico guy says, 15 minutes ago.

    But seriously, I owned this fund in the 2007-2009, maybe 2010 range. I sold it because I was tired of reading the same old doom and gloom commentaries as the market was taking off. It was easy to see the guy was out of step and his ego was in the way of adjusting.

    The best thing I ended up with from owning this fund was to realize, at least for me, owning long/short funds in general is a waste of portfolio space. If you want conservative uncorrelated assets to reduce risk in your portfolio than conservative balanced funds or even bonds or cash is the way to go. That was my learning and this is my 2-cents.

  • edited May 2017
    VintageFreak, you should have sold HSGFX on 9/17/2008.
  • Unknown veteran investor with 40 years experience, Simon, predicts bull market to continue throughout the 2020s.
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