"none of the Hussman funds has lost 32%" he says tonight
OK now that actually is pretty good. I agree most investors are sickened by the 50-55% losses we've seen a couple times. However, I don't think avoiding a 32% loss is justified or impressive if it means missing all the market's gains. I look forward to seeing how things turn out.
I understand the fear of loss, but his fear of drawdowns is pretty significant. In the last fourteen years, he's really only been unhedged for 1 of them. Granted valuations have been high most of that time but thats a lot of hedging.
It's a game of poker now. Everyone and his brother knows stocks will crater if interest rates rise. Just a question of when (or if) that happens. I think rates could stay really low for several years, Hussman must disagree with that or he would be long, because that truly is the only risk to the market. valuation means nothing in a vacuum.
Um: "Far from being perma-bearish, our present methods of classifying market return/risk profiles encourage a leveraged long position about 52% of the time in market cycles across history, encouraging a partially-hedged stance about 12% of the time, fully-hedged about 31% of the time, and hard-defensive as we are today about 5% of the time."