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HUSSMAN: “BUCKLE UP”

10 March 2009 by Cullen Roche 0 Comments

John Hussman is one of the few risk managers on Wall Street who is truly worth following.  There are quite a few pundits out there with intelligent opinions, distinguished backgrounds, and solid returns, but very few (I can count them on one or two hands) have intelligent opinions, distinguished backgrounds, solid returns AND IMPRESSIVE RISK ADJUSTED RETURNS.  Hussman is one of those managers.   He thinks volatility is about to increase to November levels:

I suspect that the markets are about to get volatile, possibly to an extent beyond what we observed in October and November. As long-term shareholders know, we don’t invest on forecasts, but on the basis of observable measures of valuation and market action. Not surprisingly, we are positioned in a way that can accommodate a strong advance as well as profound weakness. Overall, however, our investment stance has to be characterized as defensive.

If you don’t read Hussman’s free weekly letter I highly recommend it.  Nothing is more important than understanding hedging strategies and risk adjusted returns.  Anyone can look smart averaging 25% annualized returns until you find out they achieved those returns playing roulette.

Cullen Roche

Cullen Roche

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