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Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

hussmanfunds.com

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Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#31

Post by dumbfounder »

pdog wrote: post #5

This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…

Predicting that a downturn will happen is easy. A downturn will probably happen if stocks are significantly inflated (by some reasonable measure). Predicting WHEN is the hard part. He's just 10 or so years off the mark :)

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#32

Post by exelius »

junkscience2017 wrote: post #18
exelius wrote: post #7

Earlier quoted context omitted.

It’s a canary in the coal mine IMO. Sure, he’s early; but he’s not wrong. A very significant portion of growth over the last decade has been the growing ability of US companies to avoid paying US taxes. That growth eventually caps out until you reach a 0% corporate tax rate — the problem here is that shifts the tax burden 100% onto the populace, which absolutely destroys consumer spending and ultimately the economy a…

sorry but the only answer any investor should care about is achieving their financial goals over the expected investment timeframe. markets tend to rise and as a result market declines tend to be temporary the permabear thesis appeared in the early 80s when the US was in a rut and we also became a debtor nation. the permabear thesis -that debt and fiat currency would produce an economy favoring the pessimistic (but n…

I think these funds are useful as a risk hedge — there is some non-zero risk every year that the economy will collapse. If you invest in a fund that will help offset some of that risk by performing above average in a downturn, you might want to do it as part of a portfolio strategy.

Nobody should be putting their life savings into one of these. Hedge funds like this aren’t for that; they’re a risk management lever that gets set according to the economic model an investor is using.

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#33

Post by adventured »

junkscience2017 wrote: post #12
pdog wrote: post #5

This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…

right, lots of fund managers accept that crashes happen periodically...the permabears like Hussman assume they STAY low over a long period of time yet society retains enough order to let them fulfill their thesis if the market crashed that low for a decade, you would see massive regime change in every democratic nation and the rich would be stripped bare

> if the market crashed that low for a decade, you would see massive regime change in every democratic nation and the rich would be stripped bare

That wouldn't happen at all in fact. We've already recently seen that kind of economic pain on a protracted time frame. See: 1967 to 1982, a time in which inflation adjusted the S&P 500 lost 2/3 of its value. Stagflation, high unemployment, high inflation, economic chaos, price controls, war in vietnam, societal upheaval, smashed real estate values - that era saw it all. The rich were not stripped bare at all.

Spain just went through an extraordinarily painful depression, the likes of which the US hasn't seen in 80 years. The rich were not stripped bare, Amancio Ortega is worth $76 billion. Portugal went through something similar. Greece arguably had it even worse. The rich were not stripped bare.

Russia is a klepto-state that freely takes whatever it wants from the private economy. They just went through a severe recession that set their economic standing back ten years, the oligarchs were not stripped bare.

Japan saw net negative economic growth over 20 years, while the median standard of living in Japan dropped by more than 1/3 thanks to currency debasement and high taxes vs no growth. The rich were not stripped bare.

You'll of course notice the common theme across all these different cultures.

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#34

Post by [deleted] »

pdog wrote: post #5

This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…

[deleted]

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#35

Post by wiredfool »

dumbfounder wrote: post #31
pdog wrote: post #5

This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…

Predicting that a downturn will happen is easy. A downturn will probably happen if stocks are significantly inflated (by some reasonable measure). Predicting WHEN is the hard part. He's just 10 or so years off the mark :)

I've predicted 8 of the last 3 downturns.

Dooooooom I tell you.

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#37

Post by brooklyntribe »

Ok, so if you think the hell thing is going to hell, just go SHORT, it's one click away. How simple is that?

And that's why these predictions never pan out, if it's SO EASY to make a ton of cash off a crashing market, then EVERYONE will go short, since it's so EASY to make money.

And that's why markets are generally stable and it's what humans do best, we go LONG. :-)

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#38

Post by misiti3780 »

JohnJamesRambo wrote: post #8
pdog wrote: post #5

This guy expects a market loss of about -65%, which would send the S&P 500 back down to 900. He also expects negative total returns over the next 12 years. Of course, his Strategic Growth Fund has not only underperformed its benchmark (the S&P 500 index), the fund actually has negative returns over the past 1, 3, 5, and 10 year periods[1]. Losing money in this market is a truly remarkable feat. [1]: https://www.hussm…

This is why I come to Hacker News.

because of the comment or the article ?

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#39

Post by Luc »

vasilipupkin wrote: post #17
runako wrote: post #13

Earlier quoted context omitted.

This company has ~$750mm under management, and has several funds that manage to have both a) high expense ratios and b) horrible performance over the short and long terms. Serious question, for those who work in finance: how do companies like this stay in business? Shouldn't the transparency of their poor performance have long since driven them out of business? Semi-serious question, also for those who work in financ…

He may have raised funds 20 years ago and over 20 years delivered good returns. Also, underperforming S&P is not necessarily the right metric - as part of an overall portfolio that includes S&P, his funds may provide diversification benefits. To answer the question as to why can't random joe raise that money - the answer is, raising money is harder than you think.

It's not my area of expertise, but I believe it's perhaps easier to raise money now than at any time in the past.

Somewhere in this video, David Einhorn talks about this in response to a question from the public: https://www.youtube.com/watch?v=Qvz5LS9pIjs

Apparantly there's match making events set up by banks, to introduce money managers to investors.

Re: Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin

#40

Post by VMG »

UncleMeat wrote: post #21
VMG wrote: post #14

Understanding Bitcoin is hard. Here is a response to some of the criticism: > Every time a block is validated, a single node in the network gets a reward, and everyone else’s computing time is completely wasted. This is a misunderstanding of what PoW is http://www.truthcoin.info/blog/pow-cheapest/ > The system already features a rather steep cost per transaction, and hardly any of those transactions are for the purch…

Only if "arbitrary number" doesn't include an arbitrary number of addresses. You still need a transaction to set up a channel. Lightning shifts a cap on transactions to a cap on users while assuming that most people transact repeatedly with the same person and that btc users will be happy to lose the trust guarantees that btc brings over traditional services.

In addition to what my sibling comment says, LN channels retains trustlessness.

Great Zappa album btw.

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