Hussman

[Munger_Disciple]

John Hussman's op-ed in FT:

https://www.ft.com/content/abec3526-32ae-493e-bf59-2d30ccb4e50f

 

[Blake Hampton]

21 minutes ago, Munger_Disciple said:

John Hussman's op-ed in FT:

https://www.ft.com/content/abec3526-32ae-493e-bf59-2d30ccb4e50f

 

This is an incredible article, thanks for posting

[james22]

Do you know how I know you've not been reading Hussman long?

[Gregmal]

Back when I used to run the biz, we used to jokingly tell guys to keep the Hussman performance charts handy. That way, regardless of how much we sucked, we could always say “hey Hussmans still in biz”…or...”can’t sue me for honestly just sucking at my job”. lol 

[Munger_Disciple]

I don't think Hussman is a good investor but his writings are interesting. 

[mcliu]

How is he still in business..?

Hussman would be a great newsletter writer like Tilson.

[Vish_ram]

Here's why Hussman is dumb.

 

Just comparing gross value add to market value misses so many variables in the equation

 

a) profit margin - https://fred.stlouisfed.org/series/A466RD3Q052SBEA

    look how margin has dramatically improved. The reason is simple. Techs have dominated the space and have higher margins

 

b) Growth - the equation doesn't consider growth. higher growth justifies higher valuation. Techs have higher growth rates, dominate the world with winner take all approach. With AI, automation, cloud etc the domination will continue.

 

c) ROIC - these firms need low capital to grow unlike traditional non-techs. Higher the ROIC, ceteris paribus, higher the valuation 

 

Grantham is also another low IQ guy. He was preaching for years (a decade ago) that profits will mean revert. Look what had happened. 

 

[mattee2264]

Wouldn't say they are low IQ. Hussman is a market statistician. Grantham is a market historian. And both approaches have severe limitations. 

 

 

[changegonnacome]

@Vish_ram I think that's right - the US indices have become so service and software heavy (capital light writ large) that the old models are going say its expensive no matter where we are in the cycle versus the past....the average SPY company is now simply a better business than the average SPY company from 20,40, 60yrs ago.....margins, ROIC, global TAM's feeding into global growth avenues all requiring little incremental capital to do so etc.

 

You can and should pay up more for this versus the past.........within limits of course.....so a model rooted in the capital heavy past would of course flash red as Hussman's has forever basically.

[Ulti]

https://podcasts.apple.com/us/podcast/macro-voices/id1079172742?i=1000680157850

 

david Rosenberg: lament of a bear… maybe it is time to move to all cash hahah

[Gregmal]

These people are idiots. The worst is when they try to validate their nonsense whenever we do get a correction or two. One should never listen to them. You need to have a different mindset than these losers in order to find investments, period. Otherwise you end up being so scared of the macro that you miss great bottom up situations.