Hussman insists that now is an appalling time to invest in stocks, and yet he is fully invested in stocks. To save us he is also fully hedged (although there seems to be something wrong with his hedging as the fund ALWAYS goes down when the stock market goes up). Would it not be a far cheaper strategy than using all those options with all their associated costs to simply sell his stocks and put the money into short-term bonds?
The reason he doesn't do this is because he's convinced that he can meaningfully beat the index with his stockpicking, which could make hedging a better strategy. I'm doubtful that he will be able to do this in a meaningful way as he has now matched the sector and beta of the underlying index and his holdings are fairly large parts of the index themselves such as Exxon and Walmart.
That's what Benjamin Graham would do although not fully weighted one way or the other (I think it's 25%/75% max but quality of holdings are key too). Now here it's a purely Growth fund, have to go to HSTRX for bonds.