However, between 2013 and 2017, he became increasingly bearish, asserting that the "quantitative easing" ("QE") and zero interest rate policies of the Federal Reserve had contributed to a “hypervalued market”,[6] Hussman's investment performance suffered as a result, and he was labeled a “permabear”.
Hussman has regularly commented on his error during that period,[7] tracing it to his insistence on stress-testing his methods against Depression-era data following the global financial crisis, which led him to emphasize the importance of “overvalued, overbought, overbullish” conditions that had historically been reliable indications of market tops.
[11] As he did in 2000, at the peak of the technology bubble [ Hussman Investment Research & Insight, October 3, 2000 ] and in 2007, before the global financial crisis [ Market Internals Go Negative, July 30, 2007 ], Hussman regularly emphasizes that his statements about valuations are not near-term forecasts, and that bubbles can only occur when investors ignore overvaluation for years.
[12] In 1998, Hussman left academic economics to increase his focus on philanthropic efforts, using his ongoing investing work to fund charitable projects in autism, global health, education, displaced populations, homelessness, and research focused on the genetics and biology of complex conditions such as autism and multiple sclerosis.
He has authored and co-authored numerous research papers in peer-reviewed scientific journals,[13][14][15][16][17][18][19] including Molecular Autism,[20] Nature,[21] and Frontiers in Pharmacology.
Specifically, the severe disruptions observed in autism may be linked to suppression of GABAergic inhibition, resulting in excessive stimulation of glutamate-specialized neurons and loss of sensory gating.
Hussman and his wife Terri also serve on the boards of Maryland charities including the Light House Homelessness Prevention Center, and Hospice of the Chesapeake.