Long-term Wall Street bear and bitcoin holder David Tice predicts the stock market will fall by 30% in a two-year retreat. Although the veteran investor does not give the specific start date for this slump, he warns that it is likely to break hard and investors will still suffer for a long time if it breaks.
Biden Administration Policy
In remarks made during an interview, Tice, who claims to be a “believer in the Austrian School of Economics”, points to the “business-friendly policy from Washington” as one of the main reasons for his pessimism. Specifically, the veteran investor attacks some of the earlier decisions of the Biden administration by saying:
We now have a Biden government that has a Senate and a House. They are likely to introduce much more anti-capitalist policies. They have already raised the minimum wage. This is going to hurt the earnings on the cost side.
Tice also says that “easy monetary and fiscal policies that support money pressure will also hurt Wall Street.” He concludes that it is ‘not good for financial markets’.
Meanwhile, the veteran investor, sometimes called a perma-bear, is embroiled in the current enthusiasm surrounding the deployment of Covid-19. According to Tice, the vaccine is not really a miracle cure, especially now when “there are new strains of the virus, and there is definitely a risk for it.”
Nevertheless, Tice, the former manager of the Prudent Bear Fund, admits that his timing was not always on point. In addition, the permanent fund of the perma bear, which is also designed to benefit from underperformance, has increased by 32% over the past three months.
Bitcoin predicts gold
On the other hand, Tice says it expects gold, which has risen more than 25% since bottoming out on March 23, to be the ‘biggest asset for investors’. The veteran investor also believes that “gold has been dramatically underpinned by individuals and portfolio managers.”
Following his belief that “gold stocks are incredibly cheap”, Tice says that bitcoin’s performances can be seen as an indication of the future achievements of the precious metal. Tice says:
“I do not think bitcoin can be ignored,” Tice said. ‘We have seen the price of bitcoin rise from $ 10,000 to $ 40,000, which I think possibly predicts what could happen in gold.
In 2008, Tice sold the Prudent Bear Fund and at that point the fund increased by 7.97% on an annual basis, while the S&P 500 lost 1.38% annually. It remains to be seen whether Tice, who claims to have been ‘early 1998, 1999 and from 2006 to 2007’, can benefit from his latest clumsy prediction.
Do you agree with Tice’s claim that bitcoin predicts what can happen to gold? Tell us what you think in the comments below.
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