Wall Street short-seller David Tice believes that the Biden administration could enact policies that are unfriendly to business, and that U.S. stocks could plunge 30 percent.
The financial website CNBC reported that David Tice, the long-Time Wall Street short-seller who was at the helm of the Prudent Bear Fund and was famous for selling to Federated before the financial crisis broke out in 2008, has a new warning for investors: he expects a two-year-long downturn in U.S. stocks, with a plunge of at least 30%. One of his reasons is that Washington policy is not friendly to business.
Tice said in a recent interview, “Biden is now in control of the Senate and the House, and could make more anti-capitalist policies. They have raised the minimum wage, and that will hit profitability on the cost side. According to Tice, the loose monetary and fiscal policies support the printing of money, which is also detrimental to the stock market.
Tice, who is now an advisor to AdvisorShares Ranger Equity Bear ETF, is pessimistic about U.S. stocks and believes the problems are getting worse as they pile up. The market is overvalued and vaccine worries are worrisome.
Vaccines are not a panacea,” he says. We’re seeing a lot of optimism about this, but there are definitely risks ahead with new strains of viruses coming out,” he says.
Tice admits he may not be looking at the timing exactly right: “I see a bear market coming, and people call me a constant bear. I called it early in 1998, 1999, and from 2006 to 2007. The fund he currently manages is under heavy pressure, down 32% during the past three months.
Tice did not provide a clear timetable for when the stock market will start to have trouble, but “once it crashes, it could fall very hard, resulting in long-term losses for investors.
Tice still holds Gold as a preferred asset. Individuals and fund managers hold far less gold, and gold stocks are incredibly cheap,” he said.
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