Hussman Strategic Total Return HSTRX

[Jan Van]

This fund has been mentioned before, by Quasimodo and Roy I believe. I've been reading some of the commentaries by Dr. Hussman ( http://www.hussmanfunds.com/weeklyMarketComment.html ) and find them quite interesting.
Currently I'm holding about 9 month of after tax income in short term treasuries, and another 6 months in intermediate treasuries and short term tax exempt. I was wondering if it might make sense to move the intermediate and tax exempt parts over to HSTRX, and let dr. Hussman handle that.

Part of this also doubles as my "cash" component for the PP, mainly the ST treasuries. My bank account plus savings account are my first line of defense in case of need...

Thoughts? Comments?

[MediumTex]

Hussman has that wise old investor schtick down pretty well.  I like reading him too.

He's still just a fortune teller, though.

[Roy]

This fund has been mentioned before, by Quasimodo and Roy I believe. I've been reading some of the commentaries by Dr. Hussman ( http://www.hussmanfunds.com/weeklyMarketComment.html ) and find them quite interesting.
Currently I'm holding about 9 month of after tax income in short term treasuries, and another 6 months in intermediate treasuries and short term tax exempt. I was wondering if it might make sense to move the intermediate and tax exempt parts over to HSTRX, and let dr. Hussman handle that.

Part of this also doubles as my "cash" component for the PP, mainly the ST treasuries. My bank account plus savings account are my first line of defense in case of need...

Thoughts? Comments?

Hussman is a good read, a bright guy to say the least.  It can be tempting when someone combines that sort of scholarship, and discussion with "good" returns, and low drawdowns, albeit at his high prices.  He often makes moves on a weekly basis—adding to or "clipping" assets—as the valuations and market action of the prior week suggest (to him).  A busy bee indeed.  And I will continue to read him.

Note first, that a fund like his, with that sort of weekly assessment and micro-managing, is massively dependent on his being there (despite his assurances that he is designing a self-replacement model!)  So if he moves on, then what?  In that sense, his is different from other "conservative" funds, even like VWINX (which I also will not hold) for conceptual/design reasons, described here.

HSTRX (which focuses on fixed income) has a 5-year return of 8.58 which is nice for the risk.  His overall returns in that time could be explained (simulated) by you using fixed combo of lots of ST and/or Intermediate Treasuries and TIPS, 10-20% Gold, and maybe some Utility or "Value" stocks (5-10%, these are things he usually holds albeit in a massively drifting way).  And then you'd be paying about 1/3 of his expense ratio, without his management risk—however impressive it appears.  (I'm also thinking the return of the HB PP did pretty well too over that time, but forget about that for the moment.)

Heck, even INT Treasuries alone did 7.53 over the same period.  Now swap-out some fixed income for Gold (10%) and some valuey stocks (10%) and I think you're looking like a genius too—over that period.  Just not as sexy, is it, as all that active management plus weekly commentary?  And the charts.  Don't forget the charts...  

Sure going forward who knows for Hussman or the funds?  But when you break it down, one could have done similarly, with a few boring funds, and without great risk.  And the same holds true for simulating the vaunted W&W funds, but without the cool-sounding names that apparently make all the difference (except its costs more for those cool names than index funds).

Finally, if you really love Hussman and must have his implementation, you can read his weekly and approximate his holdings in ETFs, doing as well or better, and get an edge because your expenses will be about 1/4 of his to start, and then fiddled away somewhat by transaction costs at  Vanguard or wherever, but still making out pretty well, I think, and having lots more free time if you neglect your weekly commentary and chart-making sessions.  

Or if you use a variable portfolio you can let the good Dr. handle it.  But by now, I'm thinking you might be as impressive as he is.  And less expensive.

[Jan Van]

Dr. Hussman was mentioned on the Naked Capitalism blog yesterday:
http://www.nakedcapitalism.com/2010/11/ ... -role.html

And thanks for the input!