Portfolio manager John Hussman has had a tough year in his growth fund (which is a holding in three of our investment strategies), as his very cautious forecast has led him to maintain a very defensive posture by hedging his equity exposure despite a rapidly rising market. For months, he’s argued that the market is facing a specific set of conditions (overvalued, overbought, overbullish, with yields rising) that historically have preceded abrupt market declines that can knock out months worth of gains in a very quick burst before clearing and becoming safer for investors.
Yesterday’s decline on increasing geopolitical risk in the Middle East has quickly wiped out all the gains since the first week in February. It’s only one day, I know. But after months of a relentless climb, I wonder if the markets are in the midst of being “Hussman’d.”
Chart: S&P 500 Index
