The investor who sold his fund bearish as the 2008 financial crisis unfolded, delivers a grim long-term prognosis on Wall Street.
From the S&P 500 to Big Tech to bitcoin, David Tice warns that these are currently “very dangerous times” for investors.
“The market is very overvalued in terms of future earnings. We are adding debt like we have never seen before,” the former manager of the Prudent Bear Fund told Trading Nation on Friday. “We have the Treasury market acting very strangely with rates dropping dramatically.”
Tice, who is known for his bearish bets during bull markets, now advises the AdvisorShares Ranger Equity Bear ETF, which manages $ 70 million in assets. The fund grew 3% in the past month, but has lost 62% in the past two years.
He recognizes that it’s hard to predict the next major setback, and he’s often ahead. However, Tice is convinced that a market collapse is inevitable.
“We’re not out of the woods yet, and it’s a dangerous market,” Tice reiterated.
He encourages investors to weigh the risks: try to make short-term gains of 3% to 5% while facing the threat of a 40% pullback? Tice thinks this is a bet that is not worth taking.
Tice is particularly worried about Big Tech and FAANG stocks, which include Facebook, Apple, Amazon, Netflix, and Alphabet, formerly known as Google.
“A lot of money has been thrown at Alphabet and Microsoft, Apple and Facebook, Twitter and so on. Tice noted. “Costs are increasing in this industry.
Bitcoin is “very dangerous to hold today”
He also urges investors to be vigilant in the cryptocurrency space. Tice, who entered the year as a bitcoin bull, turned bearish bitcoin when it hit all-time highs in March.
“We had a bitcoin position while bitcoin was at $ 10,000,” Tice said. “However, when it came to $ 60,000, we felt like it was taking a long time … Lately there has been a lot more uproar from central bankers, Bank for International Settlements [and] the Bank of England has made some deep negative statements. I think it’s very dangerous to hold out today. “
Due to its downtrend, Tice co-founded hedge fund Morand-Tice Capital Management almost exactly one year ago. It is devoted to metallurgical and mining values. Tice, a longtime gold and silver bull, believes this is a once in a lifetime opportunity for investors.
“You look at this lack of discipline in the money and tax markets. Gold is really the place to be,” Tice said. “Over 5,000 years, gold and silver act very well as protection against fiat money.”
Gold closed at $ 1,812.50 an ounce on Friday. It’s down 4% so far this year and up 28% in the past two years. Tice expects the precious metal to rise 10% to $ 2,000 by December.
“I would own gold, especially gold and silver mining companies. These companies have never been cheaper. Many are single-digit multiples but potentially have a profit growth rate of 15. at 20% even with this stable gold price, ”Tice said. “But then you add in what we think is a 20% annual increase in the price of gold, and these ventures are going to be tremendous opportunities.”
Disclosure: David Tice owns gold, silver and mining actions.