Mark Spitznagel:
"My Perspective Is the Most Contrarian Right Now"
Mark Spitznagel, founder and Chief Investment Officer (CIO) of Universa Investments, known for his strategy of betting on 'Black Swan' events that cause major shocks in the market, has predicted that the U.S. stock market could plunge by 80% if the economic bubble bursts. However, he stated that this is not the real crash yet.
In a commentary sent to MarketWatch on the 7th (local time), Spitznagel said, "I expect an 80% crash once this is over," but added, "I do not think now is that time."
Regarding the global stock market plunge triggered by the tariff policies of the Donald Trump administration, he said, "This event is just another sell-off to shake out investors, not the world's 'Armageddon,'" and added, "The real crash will come when the bubble bursts." He further stated, "I can say with certainty that my view is probably the most contrarian investment perspective at this point."
A contrarian investment strategy means buying stocks when most people are selling and selling stocks when most people are buying. The current sell-off may actually be a short-term buying opportunity.
In an interview last year, Spitznagel warned that the "worst bubble in human history," formed due to unlimited money printing by central banks, was reaching its peak. However, he predicted that after the U.S. Federal Reserve (Fed) began easing, the economy would remain in a 'Goldilocks' state?not too hot nor too cold?for some time before the bubble bursts.
Universa Investments is a hedge fund famous for its strategy of making huge profits from Black Swan events, which are extremely unlikely to occur but cause significant shocks if they do. The fund is also well-known for having Nassim Taleb, author of the book "Black Swan" that popularized the term, as an advisor.
This fund, which provides insurance-like investment strategies to pension funds and others to prepare for market crashes, achieved returns exceeding 4000% when the market plunged due to the 2020 pandemic shock.
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