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“I am a believer in the Austrian School of Economics who says that the magnitude of the decline is proportional to the excesses created during the previous boom. We were in early 1998, 1999 and 2006 until 2007 … When it breaks, it’s likely to break hard. ”
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This is David Tice, former manager of the Prudent Bear BEARX Fund,
explaining to CNBC in a recent interview why he believes the market will eventually have a 30% hit, which will last two years.
“We now have a Biden administration that has a Senate and a House. They will probably adopt more anti-capitalist policies, “he said on Friday. “The minimum wage has already been raised. This will affect cost gains. ”
Tice, known for making bearish bets throughout his career, had his share of misses. In fact, the HDGE AdvisorShares Ranger Equity Bear ETF, where he now serves as an advisor, has lost about a third of its value in the last three months.
However, the fund is designed to benefit when the market is beaten, and Tice believes the day is coming. The problems, he said, are piling up, whether it’s high ratings or perhaps putting too much confidence in pandemic control.
“The vaccine is not really a panacea,” Tice told CNBC. “We have seen a lot of optimism in this regard, but there are new strains of the virus and there is certainly a risk of it continuing.” So what should an investor do in this climate? Tice is optimistic about GC00 gold,
and bitcoin BTCUSD,
“Gold is dramatically under-owned by individuals and portfolio managers,” he said. “I do not think bitcoin can be ignored. We’ve seen the price of bitcoin go from $ 10,000 to $ 40,000, which I think foreshadows potentially what could happen in gold. ”
Here are his comments: