When I was a wee lad in ages past, on Saturdays, after my early morning paper route, yard chores, and catechism class, I was detailed by my parents to meet my ancient aunt at her "beauty parlor" to walk her home. If this sounds like Bill Bryson's lookback, "A Lost Continent: Travels in Small-Town America", you're spot on. Of all those Saturday morning happenings, my favorite event was waiting for Aunt Nelly while her hair was tortured into something resembling a "hair-do". This was because the parlor had all the Hollywood movie magazines including "True Confessions". Also I could sit down and cool out for the first time all day.
Later on I graduated to Esquire and later to Playboy and Village Voice, but True Confessions was my first exposure to "show and tell" in the media. True confessions were uncomfortable at catechism but far better at the beauty parlor awaiting Aunt Nelly.
John Hussman has been a regular read for me since the late 1990's, even before he started his mutual funds. I remmember him raging against the light of the DotCom boom which he saw, correctly, as an abomination. Not being an Evangelical by nature or indocrination, I had a hard time with Hussman then and now. But even though he was an adjunct economics professor at University of Michigan, and my sweet and loving wife was taught to throw a spiral pass at age 11 by Woody Hays of The Ohio State University, a coach and friend of her father, I've always enjoyed Hussman's rigorous investment analysis.
If you've been with me a while you know that I consider Hussman's HSGFX (Hussman Strategic Growth) to be a bear fund during bear markets and a money market fund during bull markets. This is because Hussman is generally fully hedged but never net short of stocks. He naturally started off small in 2000 at the start of the great small and mid cap US stock rally; so he could and did pick the good stuff to buy and shorted the Russell 2000 and SPX average stuff against the good stuff. Was that good timing or what?
Hussman did extremely well during the Nasdaq meltdown from 2000 to 2002 at least partly through the benefit of the mid and small cap renaissance. He also sensed the bottom in 2002 and lifted some of his short hedges to benefit from the great 2003 raging bull. Then he froze as the bond and stock mini-bear of 2004 hit, and he became cautious as he has been ever since. Most perma-bears didn't do as well as Hussman since they refused to lighten up shorts in 2002-2003. But even so, Hussman has greatly underperformed nearly all competent long funds since early 2004.
