The investor who bought his bear fund because the 2008 monetary disaster was unfolding is delivering a grim long-term prognosis to Wall Road.
From the S&P 500 to Massive Tech to bitcoin, David Tice warns it’s a “very harmful interval” for buyers proper now.
“The market could be very overpriced by way of future earnings. We’re including debt as we’ve by no means seen,” the previous Prudent Bear Fund supervisor informed “Trading Nation” on Friday. “We now have the Treasury market performing very unusual with rates falling dramatically.”
Tice, who’s recognized for making bearish bets throughout bull markets, now advises the AdvisorShares Ranger Equity Bear ETF, which has $70 million in belongings below administration. The fund is up 3% over the previous month, nevertheless, it’s off 62% during the last two years.
He acknowledges it’s powerful to time the subsequent main pullback, and he’s typically early. Nevertheless, Tice is satisfied a market meltdown is unavoidable.
“We’re not out of the woods but, and this can be a harmful market,” Tice reiterated.
He’s encouraging buyers to weigh the risks: Attempt to earn 3% to five% near-term features whereas contending with the specter of a 40% pullback? Tice thinks it’s a guess, not value taking.
Tice is especially nervous about Big Tech and the FAANG shares, which embody Facebook, Apple, Amazon, Netflix, and Alphabet, previously often known as Google.
“Some huge cash has been thrown at Alphabet and Microsoft, Apple and Fb, Twitter, and so on.,” famous Tice. “Prices are going up in that sector.”
Bitcoin is ‘very harmful to carry at present’
He’s additionally urging buyers to be vigilant within the cryptocurrency area. Tice, who got here into the yr as a bitcoin bull, turned bearish on bitcoin when it hit all-time highs in March.
“We had a bitcoin place when bitcoin was at $10,000,” Tice mentioned. “Nevertheless, when it acquired to $60,000 we felt like that was lengthy within the tooth… These days, there’s been much more uproar from central bankers, Financial institutions for Worldwide Settlements [and] the Financial institution of England have made profound damaging statements. I feel it’s very harmful to carry at present.”
Resulting from his general bearishness, Tice co-founded hedge fund Morand-Tice Capital Administration nearly precisely a yr in the past. It’s dedicated to steel and mining shares. Tice, a long-time gold and silver bull, believes it’s a as soon as in a decade alternative for buyers.
“You have a look at this lack of self-discipline in financial and monetary markets. Gold is actually the place to be,” mentioned Tice. “Over 5,000 years, gold and silver do very nicely as protection against fiat money.”
Gold closed at $1,812.50 an oz. on Friday. It’s down 4% to date this yr and up 28% over the previous two years. Tice expects the dear steel to rally 10% to $2,000 by December.
“I’d be proudly owning gold, particularly gold and silver mining corporations. These corporations have by no means been cheaper. Many are at single-digit multiples but have doubtlessly 15 to twenty% development charge in earnings even with this flat gold value,” Tice mentioned. “However then you definitely add on what we expect goes to be a 20% annual improve within the gold value, and these corporations are going to be excellent alternatives.”