In 1914, a magnetic alloy with an unusually high magnetic permeability and low hysteresis was discovered at the Bell Telephone Laboratories. This magnetic alloy resulted from a series of investigations on the iron-nickel alloy system, in which the nickel content was systematically varied. Under a very specific combination of the alloy composition (78.5% Ni-content), a drastic increase in magnetic permeability and a decrease in coercive force were observed. In the past, this unusual behavior of the permalloy has been attributed to the anisotropy constant, however, there is still no theory that explains this drastic decrease in hysteresis in magnetic alloys. In today's talk, I will show how magnetostriction constants, in addition to anisotropy, play a surprisingly important role in reducing hysteresis at the permalloy composition. Our results demonstrate agreement with the permalloy experiments and provide theoretical insights into developing magnetic alloys with negligible hysteresis.