The Bubble Term

By John P. Hussman, Ph.D. – Hussman Funds

Across more than four decades of navigating market cycles, sharing weekly or monthly market commentaries the entire time, I’ve had multiple opportunities to write about speculative bubbles and their subsequent collapse, in real time.

Neither the market collapse that followed the peak of the tech bubble in 2000, nor the crisis that followed the mortgage bubble in 2007, were particularly unusual in terms of the losses that followed those extremes. The notable thing, from the standpoint of our investment discipline, is that both were obedient. History has rarely afforded bubbles a life span of more than a decade, and neither the tech bubble nor the mortgage bubble that followed it were exceptions. People who dismiss everything I say with “permabear” don’t seem to realize that the reputation earned by navigating decades of full cycles well – prior to the current bubble – is the reason investors know my name in the first place.