How can the S&P be down .53% and HSGFX be down 5 times that amount in one day??? Unless he is leveraged long by 5 times, the only answer can be that he picked every loser today and sold every winner yesterday.
Meanwhile Hussman pockets 20 million/year for "managing" your money.
I got out of HSGFX earlier this year and am up 10% since then. Probably one of the best investment moves I've made.
Nice post. I'm sure I speak for others too when I say thanks for elevating the level of discourse!
The real surprise for me in all this was how bad some of the new/emerging market debt got hammered. Although in hindshight it should have been obvious what the impact of the credit squeeze (esp. commercial paper) would be in those markets. Argh.
Oh well, live and learn...and thank goodness for a building a cash position to take advantage of current times.
Wish mine had been 70%+ instead of only 30%+ (a tip of the hat to your bud and hype), but I'm only down 15% off the peaks last year and there are bargains to be had, so who's complainin' - much :)
I've been in BEARX all this year, except from mid-July until mid-August. I don't own much (about 7% of portfolio) but I've kept it as a hedge against a few stocks I was long. Performance wise it has underperformed the inverse of the S&P and Nasdaq. I'm not disappointed in the fund as it has accomplished its purpose but I have no plans to keep it long term. It has a tendency to lose more on big up days than it gains on bid down days.
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I believe & continue to always try to work from a solid core of investments or managers that potentially can provide flexibility, defense/risk management, diversification/asset allocation, low betas, tight standard deviations & offer non-correlation. It’s wise to seek disclosure & a commitment to eating their “own cooking.” Alpha, overweighting & compliments can be added elsewhere – stocks, ETFs, options, private equity/investments, real estate, insurance, etc.
Think Mr. Market is reaffirming in a way we haven’t seen that you need an iron will & discipline to create a prudent plan, monitor that plan, rotate somewhat against the herd (i,e. cash positions should have been raised & your sells executed for profits & protection ahead of the curve … not now). Hopefully we all keep getting better. FYI … though mostly a fundamentalist I will keep an eye on PnF charts from time to time.
Of course like these other folks crushing Hussie & the markets YTD I was lucky to had funds w/ Andrew Lahde! ;-) About the only real good advice I can pass on is Mother Teresa’s comment about how the avg. person can affect the world – go home & love your family!
My apologies for the length. Q … anyone else seething that the guy who steals like $25 bucks from a 7-11 is subjected to more punishment than the thieves & criminals who game the game for themselves on Wall St. (& what a revelation ... always have ... duh!) & put our portfolios, houses, jobs, the economy & possibly the country at risk?
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Hype – I’m not crass enough or astute enough to have any good ideas for you. Don’t know you or your situation. Maybe practice golf or MMA?
Might be a good time to bone up on risk perspectives. Review writings of N. Taleb, P. Bernstein, J. Grantham, R. Arnott , B. Ritholtz, etc. if interested. I’m re-reading J. Mauldin (Oak or Wilk also reads him), particularly topics of why investors fail & “financial physics” along w/ data on previous bear markets & crashes.
Also since returns are mostly underwater or under attack, how can we push back some? Revisiting costs/fees & being on top of taxes & tax harvesting are some channels. If you have a large IRA see if you’re taking advantage of all it can offer (Ed Slott is a good source here). Also times like these offer the opportunity to take stock of your planning & investment strategies.
We can probably agree there’s more than 1 path to portfolio success. IMHO investing connotes time (therefore I don’t get the rants on daily price changes in mutual funds). Speculation is the fun dangerous “bastard son” of investing (I believe a very small piece for most) yet a valid component. Savings is all together a different animal (and why comparisons of equities to money markets esp. in the short term are ludicrous).
So called pundits are pissing me off. It’s great that W. Buffett .et. al have almost infinite funds & cash to purchase things at vastly generous prices & terms. The folks I know aren’t like Warren. They don’t have much in dry powder to do all the on sale buys these talking heads keep screaming about are the opportunities of a lifetime (yet markets keep falling & could go lower) esp. if they are in some type of investment plan the past yrs. & also cuz most don’t move out anywhere near highs, or raise cash as you’ve done. I have a bud in Austin, TX w/ his own RIA who placed all his clients in cash about a year ago. Wish I was his client right about now!
I’ve weeded out all ind. stocks over the yrs. Actually did some buys yesterday … there has to start to be value here somewhere in regard to investing. Road up & took large profits in gold & India awhile back. For speculation, global financials & the BRICs have given back so much there may be big opportunities for returns if patient. Bond yields are becoming attractive (saw inv. grades at 6.6 & higher). Even if you’re in the accumulation stage you might want a position if you believe avg. historic equity returns will be lower going forward & concerned about risk premium. Struggled w/ entry into pure bear funds about 8 wks. ago, I usually don’t go short much or use too much leverage, but was apprehensive & might have missed that boat (of course they’ve sky rocketed!). My position in managed futures is doing nicely.
I don't think that the international small cap companies will have any easier time finding sources of financing -- but they are bit less dependent on it (than their domestic counterparts) -- and they have been beaten down more badly!
Are the foreign small caps in better shape as far as getting financing? I like the small guys coming out of a bear but like you said about frozen credit, makes me wonder if it will be different this time (i.e. smaller co's PPS outperforming statistically).
<Hey Hype welcome back ... what's been up? Not the markets ... Yeah, I'll have to begrudgingly take a -6% YTD, but feel some relief looking at broad based declines of about 40% or so.>
Hey iratherbe -- sorry, I forgot to respond to the first part of your note. Yeah, the markets certainly haven't been up! I hope you have fared well. I went approx 70% cash in the Fall of 2007 and pretty much stayed that way until the last few weeks. Now I am only 35% cash. I agree with Buffett when he says to be greedy when everyone else is fearful. I might be a bit early -- wouldn't be surprised to see one last sharp move downward that shakes out the last sellers -- but I think we are putting in a bottom here. Economy will probably suck for the next 18-24 months, but the stock market is a discounting mechanism. Certainly valuations have improved. Been nibbling at international small cap and emerging markets as well -- both have been destroyed. I worry about smaller domestic companies being able to get financing over then next twelve months (the credit and lending markets are absolutely frozen) so I am biased toward blue chips at the present time. I was really worried about a complete financial meltdown a month ago, so I established a postion in gold, but I sold it on 10/14 for a slight loss when that threat had diminshed (the global coordinated rate cut was huge). So, all and all, I am just trying to be patient on my remaining cash -- looking for deals. I would love to have another opportunity to buy AAPL under $90, with the hope I can add to it if it declines further. Etc. Any good ideas for me?
"When a "perpetual" bear like Hussman starts to see value in this market -- I think it serves one well to pay attention"
Stevie Wonder could see value in this market.At 8000, if this market doesn't represent some value then we better close the stock market and just use CD's and MM funds.