Stocks will fall at least 30% in a drawn-out bear market: David Tice

Long-time bear David Tice has new warning for traders.

He expects shares to fall at least 30% in a downturn that lasts two years. One of his main causes: Business unfriendly insurance policies from Washington.

"We now have a Biden administration that has a Senate and a House. They're likely to enact very much more anti-capitalist policies," the investor informed "Trading Nation" on Friday. "They have already raised the minimum wage. That's going to hurt earnings on the cost side."

According to Tice, straightforward financial and financial insurance policies that help cash printing will additionally sting Wall Street.

"All of this is not good for financial markets," he added.

Tice is understood for working the Prudent Bear Fund earlier than promoting to Federated in 2008, simply because the monetary disaster was unfolding.

Now as an advisor to the AdvisorShares Ranger Equity Bear ETF, Tice has spent a lot of his profession making bearish bets throughout bull markets. His present fund, which can also be designed to revenue from underperformance, has been below strain. It's down 32% in the final three months.

In his newest warning, Tice contends the issues are piling greater. He additionally cites an overvalued market and coronavirus vaccine issues for his pessimism.

"The vaccine is not really a panacea," he added. "We've seen a lot of optimism about that, but there are new strains of the virus, and there is certainly risk going forward."

Tice acknowledges his timing hasn't at all times been on the mark.

"I've seen bear markets approach, and people have called me a perma bear," he mentioned. "I'm a believer in the Austrian School of Economics that says that the magnitude of the decline is proportional to the excesses created during the prior boom. I was early in 1998, 1999 and in 2006 to 2007."

'When it breaks, it's prone to break onerous'

Despite his bearishness, Tice doesn't have a timeline on when the market hassle will begin.

"Markets tend to get extended," he mentioned. "But when it breaks, it's likely to break hard and cause investors to suffer for a long time."

So, Tice remains to be advocating gold, which up greater than 25% because the March 23 inventory market backside, as a prime asset for traders.

"Gold is dramatically under-owned by individuals and portfolio managers," he famous. "Gold stocks are incredibly cheap."

He additionally likes bitcoin as an funding.

"I don't think that bitcoin can be ignored," Tice mentioned. "We have seen the price of bitcoin go from $10,000 to $40,000 which I think is foreshadowing potentially what might happen in gold."

The White House didn’t reply to a request for touch upon Tice's remarks.

Disclosure: David Tice owns gold, gold shares, silver and bitcoin. He additionally owns places in the S&P 500 and QQQ.

Disclaimer

Wall Street is on a collision course with drawn-out bear market: David TiceTrading Nation

primarily based on web site supplies www.cnbc.com

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