The investor who sold his bear fund as the 2008 financial crisis unfolded is giving Wall Street a bleak long-term forecast. David Tice cautions that investors are facing a “very risky phase” right now.
“In terms of future earnings, the market is excessively expensive. On Friday, the former Prudent Bear Fund manager told “Trading Nation” that “we are increasing debt as we’ve never seen.” “The Treasury market is behaving strangely, with rates dropping dramatically.”
Tice, who is notorious for taking negative bets during bull markets, currently serves as an advisor to the AdvisorShares Ranger Equity Bear ETF, which manages $70 million in assets. The fund has gained 3% in the last month but has lost 62% in the prior two years.
He admits it’s difficult to predict the next large pullback, and he’s frequently wrong. Tice, on the other hand, believes a market crash is unavoidable. Tice continued, “We’re not out of the woods yet, and this is a risky market.”
He advises investors to consider the risks: should they try to earn 3% to 5% near-term returns while also dealing with the possibility of a 40% drop? Tice believes it is a risky gamble.
Tice is particularly concerned about Big Tech and the FAANG stocks (Facebook, Apple, Amazon, Netflix, and Alphabet, formerly known as Google), which include Facebook, Apple, Amazon, Netflix, and Alphabet, formerly known as Google.
Tice said, “A lot of money has been thrown at Alphabet and Microsoft, Apple and Facebook, Twitter, and other companies.” “In that industry, costs are rising.”
Bitcoin is ‘extremely risky to keep now.’
He also advises cryptocurrency investors to exercise caution. When bitcoin hit all-time highs in March, Tice, who started the year as a bitcoin bull, turned pessimistic.
Tice explained, “We had a bitcoin stake when bitcoin was $10,000.” “However, when it came to $60,000, we felt it was becoming a little old… Central bankers have recently become more vocal, with the Bank for International Settlements [and] the Bank of England issuing strong negative pronouncements. Today, I believe it is quite harmful to hold.”
Tice co-founded hedge fund Morand-Tice Capital Management almost exactly a year ago, owing to his overall bearishness. It is devoted to stocks in the metals and mining industries. Tice, a long-time gold and silver bull, feels this is a once-in-a-decade investment opportunity.
“Take a look at the lack of discipline in the financial and monetary sectors. “Gold is the place to be,” Tice remarked. “Gold and silver have shown to be excellent protection against fiat money over the last 5,000 years.”
On Friday, gold was valued at $1,812.50 per ounce. So far this year, it’s down 4%, but it’s up 28% in the last two years. Tice forecasts a 10% increase in the price of gold to $2,000 by the end of the year.
“I would be owning gold, especially gold and silver mining companies. These companies have never been cheaper. Many are at single digit multiples yet have potentially 15 to 20% growth rate in earnings even with this flat gold price,” Tice said.
“But then you add on what we think is going to be a 20% annual increase in the gold price, and these companies are going to be outstanding opportunities.”
