John Hussman

John Hussman

Last Update: 02-01-2016

Number of Stocks: 203
Number of New Stocks: 52

Total Value: $704 Mil
Q/Q Turnover: 38%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

John Hussman Watch

  • John Hussman: Lessons From the Iron Law of Equilibrium

    Last week, the spread between bullish and bearish sentiment widened substantially, pushing market conditions to what I’ve often described as an “overvalued, overbought, overbullish” syndrome.

    While our general outlook has remained rather neutral in recent weeks, this shift pushes our immediate outlook back to hard-negative. However, I should emphasize that this outlook is not particularly robust at present. Indeed, we could soon find ourselves back to a neutral outlook in the event of a moderate further improvement in market internals. As I’ve emphasized regularly since mid-2014, when we adapted our methods to address the key challenges we encountered in the half-cycle since 2009 (see the Box in The Next Big Short for a detailed narrative), the advancing half-cycle since 2009 has been different from market cycles across history, in that aggressive central bank easing has persistently deferred the typical consequences of overvalued, overbought, overbullish conditions. In the face of QE, one had to wait until market internals deteriorated explicitly (indicating a shift toward risk-aversion among investors) before adopting a hard-negative outlook.


  • Murray Stahl Buys Exxon, Suncor in 1st Quarter

    Murray Stahl (Trades, Portfolio) is the chairman of Horizon Asset Management Inc. During the first quarter he bought shares in many stocks, and the following are his most heavily weighted trades:

    Stahl raised his stake in Silver Wheaton Corp. (SLW) by 35.19% with an impact of 0.58% on the portfolio.


  • John Hussman: Permanently High Plateaus Have Poor Precedents

    “Stock prices have reached what looks like a permanently high plateau.”

    Irving Fisher, October 21, 1929


  • John Hussman: Rounding the Bubble's Edge

    The single most important quality that investors can have, at present, is the ability to maintain an historically informed perspective amid countless voices chanting, “This time is different,” and arguing that long-term investment returns have no relationship to the price that one pays.

    From a long-term, historically informed investment perspective, the Standard & Poor's 500 remains obscenely overvalued on valuation measures most closely correlated with actual subsequent market returns (and that have remained tightly correlated with actual market returns even in recent cycles). We estimate that S&P 500 nominal annual total returns will average only about 0% to 2% on a 10- to 12-year horizon with negative expected real returns after inflation.


  • John Hussman: Fire Suppression

    In 1988, Yellowstone National Park went up in flames. In the worst catastrophe in the history of U.S. National Parks, nearly 800,000 acres of forest and surrounding areas were scarred by the uncontrollable blaze. The root cause of the inferno, as Mark Spitznagel recounts in his book The Dao of Capital, was fire suppression:

    “The spread of fire-suppression mentality can be linked to the establishment of forest management in the United States, such that by the early 1900s forests became viewed as resources that needed to be protected - in other words, burning was no longer allowed. The danger of this approach became tragically apparent in Yellowstone, which was recognized by the late 1980s as being overdue for fire; yet smaller blazes were not allowed to burn because of what were perceived to be risks that were too high given the dry conditions. And so smaller fires were put out, but in the end could not be controlled and converged into the largest conflagration in the history of Yellowstone. Not only did the fire wipe out more than 30 times the acreage of any previously recorded fire, it also destroyed summer and winter grazing grounds for elk and bison herds, further altering the ecosystem. Because of fire suppression, the trees had no opportunity or reason to ever replace each other, and the forest thus grew feeble and prone to destruction... In 1995, the Federal Wildland Fire Management policy recognized wildfire as a crucial natural process and called for it to be reintroduced into the ecosystem... Central bankers, too, could learn a thing or two from their forestry brethren.”


  • John Hussman: Run of the Mill Outcomes Vs. Worst-Case Scenario

    With the Standard & Poor's 500 Index at the same level it set in early November 2014, and the broad NYSE Composite Index unchanged since October 2013, the stock market continues to trace out a massive arc that is likely to be recognized, in hindsight, as the top formation of the third financial bubble in 16 years.

    The chart below shows monthly bars for the S&P 500 since 1995. It's difficult to imagine that the current situation will end well, but it's quite easy to lose a full-cycle perspective when so much focus is placed on day-to-day fluctuations. The repeated speculative episodes since 2000 have taken historically reliable valuation measures to extremes seen previously only at the 1929 peak and to a lesser extent, the 1937 peak (which was also followed by a market loss of 50%). Throughout history, at each valuation extreme – certainly in 2000, 2007 and today – investors have openly embraced rich valuations in the belief that they represent some new, modern and acceptable “norm,” failing to recognize the virtually one-to-one correspondence between elevated valuations and depressed subsequent investment outcomes.


  • John Hussman: Extinction Burst

    From a long-term investment standpoint, the stock market remains obscenely overvalued, with the most historically reliable measures we identify presently consistent with zero 10- to 12-year Standard & Poor's 500 nominal total returns and negative expected real returns on both horizons.

    From a cyclical standpoint, I continue to expect that the completion of the current market cycle will likely take the S&P 500 down by 40% to 55% from present levels, an outcome that would not be an outlier or worst-case scenario but instead a rather run-of-the-mill cycle completion from present valuations.


  • John Hussman Sells Infosys, Cisco, Aetna

    John Hussman (Trades, Portfolio) is the president and principal shareholder of Hussman Strategic Advisors, the investment advisory firm that manages the Hussman Funds. He is also the president of the Hussman Investment Trust. The following were his largest sales during the fourth quarter.

    He almost closed his stake in Infosys Ltd. (INFY), reducing it by 99.14% and the deal had an impact of –1.94% on the portfolio.


  • Bearishness Is Strictly for Informed Optimists

    From a long-term perspective, we believe that investors have a strong opportunity here to reduce equity risk near the peak of a market cycle that has reached the second-greatest overvaluation extreme in U.S. history (second only to the 2000 peak).

    Among the valuation measures we’ve found most strongly correlated with actual subsequent Standard & Poor's 500 10- to 12-year total returns, market valuations have pushed to a level that is more than double their reliable historical norms. From these levels, we fully expect 10- to 12-year S&P 500 nominal total returns near zero, with negative real returns after inflation.


  • Sands Capital Boosts Stake in Edwards Lifesciences

    Frank Sands' Sands Capital Management boosted its stake in Edwards Lifesciences (NYSE:EW) in the fourth quarter by adding 9,598,997 shares.

    Edwards Lifesciences got started when Miles “Lowell” Edwards had the idea at the age of 60 to mechanize the human heart. Edwards had an engineering background in hydraulics and fuel pump operations. He presented the concept to Dr. Albert Starr, a young surgeon at the University of Oregon Medical School, who thought the idea was too complex. Instead, Starr encouraged Edwards to focus first on developing an artificial heart valve, for which there was an immediate need.


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