Diary of a Financier

FYI: In the End, the Market Is Always Right

In Idiosyncrasy on Mon 10 Jan 2011 at 09:47
  • John Hussman says he “underestimated” investors’ willingness to accept cosmetic repairs to the economy/markets, but he remains bearish.
  • Traders note: in the end, you’re only right if the Market agrees with you.

Today, John Hussman issued a statement:

…in hindsight, I frankly underestimated the willingness of investors to believe that the underlying structural difficulties of the economy (which still persist in my view) were so easily solved by disabling fair-market accounting disclosure and repeatedly violating the provisions of the Federal Reserve Act (specifically 13c and 14b).

This guy has missed the entire rally since March ’09.  In fact, as The Reformed Broker notes, Mr. Hussman has been “on the sideline (or worse, short)… for two years now.”  He sounds like the Fonz trying to apologize, and he’s stubbornly staying the course.  Why do I care?  Because a great lesson comes from this:

Unfortunately, he’s committed Cardinal Sin Number 1 in the investment game: Conflating his views of what should happen with what could happen.  He is the anti-David Tepper, more concerned with the violated rules of the game than with winning the game itself.


  1. Well stated! That is what happens when a person self-proclaims they are the center of the universe, and the rest are merely their private audience. Mr. Hussman needs to be aware he serves his customers and not vice-versa!

  2. […] reminded of my own advice to John Hussman, as Josh Brown exclaimed, “Cardinal Sin Number 1 in the investment game: […]


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