In the long run, Wall Street bear and bitcoin holder David Tice predicts the stock market will crash by 30% in a pullback that will last for two years. While the veteran investor does not provide the specific start date for this downturn, he cautions that when it breaks, “it will likely break hard and suffer investors for a long time.”
Biden Administration Policy
In comments made during a interviewTice, who claims to be a “believer in the Austrian School of Economics”, points to Washington’s “business-unfriendly policies” as one of the main reasons for his pessimism. In particular, the veteran investor attacks some of the Biden government’s early decisions, saying:
We now have a Biden administration with a senate and a house. They are likely to pursue much more anti-capitalist policies. They have already raised the minimum wage. That will hurt the revenue on the cost side.
Tice also says that “simple monetary and fiscal policies that support money printing will also sting Wall Street.” He concludes that this “is not good for the financial markets”.
Meanwhile, the veteran investor, sometimes referred to as a “perma” bear, is getting caught up in the current enthusiasm surrounding the introduction of the Covid-19 vaccine. According to Tice, “the vaccine is not really a panacea,” especially now that “there are new strains of the virus, and there is certainly a risk for the future.”
Nonetheless, Tice, the former manager of the Prudent Bear Fund, admits to his timing has not always been on the mark. Additionally, the current perma bear fund, which is also designed to benefit from underperformance, is down 32% in the past three months.
Bitcoin predicts gold
On the other hand, Tice says he expects gold, which is up “more than 25% since the market floor on March 23,” to be the “main asset for investors”. In addition, the veteran investor believes that “gold is dramatically under-owned by individuals and portfolio managers.”
In addition to his belief that “gold stocks are incredibly cheap,” Tice says bitcoin’s performance can be seen as an indicator of the precious metal’s future performance. Tice says:
I don’t think bitcoin can be ignored, ”said Tice. “We’ve seen the price of bitcoin rise from $ 10,000 to $ 40,000, which in my opinion foreshadows what could happen in gold.
In 2008, Tice sold the Prudent Bear Fund and by then the fund had appreciated 7.97% year on year, while the S&P 500 was down 1.38% annually. It remains to be seen if Tice, who claims to have been “early 1998, 1999 and 2006-2007”, can take advantage of his latest bearish prediction.
Do you agree with Tice’s claim that bitcoin is a foreshadowing of what can happen to gold? Tell us what you think in the comments section below.
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