Long-term Wall Street bear and bitcoin holder David Tice predicts that the stock market will fall 30% in a retreat that will persist for two years. Although the veteran investor is not giving a specific start date for this retraction, he warns that when it breaks, “it is likely to burst and cause investors to suffer for a long time”.
Biden administration policies
In comments made during an interview, Tice, who claims to be a “believer in the Austrian School of Economics”, points out “policies hostile to Washington’s business” as one of the main reasons for his pessimism. Specifically, the veteran investor attacks some of the Biden government’s first decisions by saying:
We now have a Biden government that has a Senate and a House. They are likely to adopt much more anti-capitalist policies. They have already raised the minimum wage. This will affect earnings on the cost side.
Tice also says that “easy monetary and fiscal policies that support printing money will also hurt Wall Street.” He concludes that this “is not good for financial markets”.
Meanwhile, the veteran investor, who is sometimes called a “permanent” bear, demonstrates the current enthusiasm for the launch of the Covid-19 vaccine. According to Tice, “the vaccine is not really a panacea”, especially now, when “there are new strains of the virus and there is certainly a risk in the future”.
Still, Tice, the former manager of the Prudent Bear Fund, admits that he didn’t always get the time right. In addition, the current perma bear fund, which was also designed to profit from underperforming, has dropped 32% in the past three months.
Bitcoin Foreshadows Gold
On the other hand, Tice says he expects gold, which has risen “more than 25% since the stock market bottom on March 23,” to be the “main asset for investors”. In addition, the veteran investor thinks that “gold is drastically under-owned by individuals and portfolio managers”.
In addition to his belief that “gold stocks are incredibly cheap”, Tice says that bitcoin’s performance can be seen as an indicator of the future performance of the precious metal. Tice says:
I don’t think that bitcoin can be ignored, ”said Tice. “We saw the price of bitcoin go from $ 10,000 to $ 40,000, which I think is a potential harbinger of what could happen with gold.
In 2008, Tice sold the Prudent Bear Fund and, at the time, the fund had increased in value at an annualized rate of 7.97%, while the S&P 500 lost 1.38% per year. It remains to be seen whether Tice, who claims to have been “in the beginning of 1998, 1999 and from 2006 to 2007”, can profit from his latest bearish forecast.
Do you agree with Tice’s claim that bitcoin is foreshadowing what could happen to gold? Tell us what you think in the comments section below.
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