The investor who bought his bear fund because the 2008 monetary disaster was unfolding is delivering a grim long-term prognosis to Wall Avenue.
From the S&P 500 to Massive Tech to bitcoin, David Tice warns it is a “very harmful interval” for buyers proper now.
“The market may be very overpriced when it comes to future earnings. We’re including debt like we have by no means seen,” the previous Prudent Bear Fund supervisor informed “Trading Nation” on Friday. “We’ve got 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 property beneath administration. The fund is up 3% over the previous month, however it’s off 62% over the past two years.
He acknowledges it is powerful to time the subsequent main pullback, and he is typically early. Nevertheless, Tice is satisfied a market meltdown is unavoidable.
“We’re not out of the woods but, and it is a harmful market,” Tice reiterated.
He is encouraging buyers to weigh the risks: Attempt to earn 3% to five% near-term beneficial properties whereas contending with the specter of a 40% pullback? Tice thinks it is a wager not price taking.
He is additionally urging buyers to be vigilant within the cryptocurrency area. Tice, who got here into the 12 months 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 bought to $60,000 we felt like that was lengthy within the tooth… These days, there’s been much more uproar from central bankers, Financial institution for Worldwide Settlements [and] the Financial institution of England have made profound damaging statements. I believe it’s totally harmful to carry at present.”
As a consequence of his total bearishness, Tice co-founded hedge fund Morand-Tice Capital Administration nearly precisely a 12 months in the past. It is dedicated to metallic and mining shares. Tice, a long-time gold and silver bull, believes it is a as soon as in a decade alternative for buyers.
“You take 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 is down 4% to this point this 12 months and up 28% over the previous two years. Tice expects the valuable metallic to rally 10% to $2,000 by December.
“I might be proudly owning gold, particularly gold and silver mining firms. These firms have by no means been cheaper. Many are at single digit multiples but have probably 15 to twenty% progress price in earnings even with this flat gold worth,” Tice mentioned. “However then you definately add on what we predict goes to be a 20% annual improve within the gold worth, and these firms are going to be excellent alternatives.”