The Impression of Invincibility

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

You can’t possibly call a bubble or a bust to the right day, except once every several lifetimes. What you can do, though, is to identify bubbles that eventually burst. That turns out, in the past to have been intellectually pretty straightforward. You can measure them, and all of them eventually go back to trend. And that movement from very high back to trend has always made cash look very much better for quite a few years. These are not insignificantly long periods of time. They add up to half of all the time.

In terms of a historian, I put a lot of weight on 1929, I think it’s a wonderful example. Japan of course, the mother of all of them. It would be highly unlikely for this one to not be similar, and at or around several years in the future, 5, 10, even 15, it’s highly likely – from a historical point of view – you’ll reach a point where you would have rather been in cash.”

– Jeremy Grantham, GMO, The Master Investor with Wilfred Frost, July 10, 2025