He is conservative but has a sensible methodology. The main reason his returns don’t match the S&P since inception is that after the bottom kicked in in 2009, he ran an extremely conservative allocation while he tested and adapted his methodology to see how it would have survived the Great Depression (he had previously only used post-WWII data due to availability, and it took a while to find the data to do the depression-era testing). While he was doing the data testing, the market roared upwards and he missed those gains.
Apparently, it turned out his methods would have done ok in the depression, but it could have been improved a little more with some changes that he’s since added. However, the gains missed out in 2009 and early 2010 haunt him and a lot of people dismiss his entire record because of it. Right or wrong, we’ll only know in the future.
I like his commentaries, though after a while they start to sound repetititive. He’s one of the few commentators that occasionally reveals the mathematics behind his process. He never reveals the whole picture, and there’s some relative value stuff he clearly does too that he doesn’t share at all, but I’ve found it informative.
As for why he still has investors, that’s another question. Some people just like the approach, feel it’s more thought out than the “we identify our 4 best ideas and load up on them every quarter,” and put money with him that reason. There’s also personal wealth and family wealth in there, I’m sure. A lot of fund managers keep their wealth in funds just to maintain a track record, if they think their strategy will eventually perform well again.
thanks for the perspective 
Many regard him as an example of how intellectuals are not great investors.
Just looked at his returns which are negative for the last 5 years.
Given the market for that time period, I am not sure in which context his strategy can be good, except if he is a short only fund.
Otherwise you have to try hard to lose money these days if you are mostly in western equities.
The issue is that he hedged the beta exposure and most of his funds are fully hedged. So it means that he’s staying away from taking on market risk, and his relative value calls have been wrong too, probably because he expected mean reversion faster than the Fed has been willing to allow it.
I can understand people saying they don’t want to do this because the track record just looks too scary, and I might be one of them myself, but if you are running a fund that can effectively set its beta to zero, it isn’t really that incredible that you can get a negative return over the last few years.
If you are long-only, then yes, it would have been hard to get a negative return if you just threw darts at the WSJ, but this fund uses hedging.
With returns like this why not buy treasury or just put your money under the mattress…
or pillow…
should i send this guy a rusty hacksaw?
http://finance.yahoo.com/news/random-stock-picking-beat-p-074932565.html
My biggest frustration with Hussman over the years has been that he seemed to feel he was right and the market was wrong. Or that the Fed shouldn’t have done something, and his underperformance wasn’t his fault. I could be projecting my own biases onto what I get from his commentaries, but I grew tired of his act a few years ago. Seems like a smart guy and I have nothing against him personally. But his commentaries are no longer in my rotation.
of course his underperformance is his fault, its his strategy.
All i can say that he was really good in that kind of stuff in fact even i finish MBA course i can say i am not still good when it comes to managing finances.