‘Black Swan’ Fund Chief Predicts Stocks Will Explode Higher Then Crash

Prepare for stocks to rocket higher then suffer a crushing decline, the boss of a “Black Swan” fund says.

“I’ve been looking for a blow-off in equities for over three years now — followed by the worst crash since 1929,” Mark Spitznagel, the founder and chief investor of Universa Investments, told Business Insider in a recent email.

“That blow-off is still in process,” Spitznagel said. “Probably will culminate in the months ahead.”

Universa specializes in “tail-risk hedging” or protecting investors’ portfolios from rare, extreme, and unpredictable events. “The Black Swan” author Nassim Nicholas Taleb, who previously ran a hedge fund with Spitznagel, is the firm’s scientific advisor.

Spitznagel has been bullish since 2022, but expects stocks to eventually march off a cliff. Immense buzz around AI, interest-rate cuts, and historic levels of government spending have propelled stocks higher with little interruption.

The Universa chief told Business Insider he’s a “big believer in AI,” but “asset bubbles have a hype that is independent of the underlying idea.”

Hype has also fueled gold’s record rally, he said, before adding that the yellow metal will likely be an “important asset in the years ahead.”

Goldilocks and Papa Bear

Spitznagel issued a similar outlook in a letter to Universa investors in January.

“I remain a believer in gold’s long-term thesis, but I expect it to fall — precipitously — alongside other risk assets when the turn comes,” he wrote. “Like crypto, it is an upside play here.”

Spitznagel anticipated a “Goldilocks zone” for investors in the year ahead, comprising “falling inflation and rates, a slowing economy but not too slow, and sentiment flipping toward euphoria” before a “final blow-off in equities.”

He also warned the “greatest bubble in human history” was approaching its conclusion as “the Goldilocks market peaks and Papa Bear arrives for the historic bust that is logically to follow.”

Spitznagel isn’t alone in diagnosing a market bubble and predicting a painful crash. Michael Burry of “The Big Short” fame and GMO’s Jeremy Grantham have both been sounding the alarm for years now.

On the other hand, investors Ross Gerber and Kevin O’Leary have told Business Insider they’re not worried as AI is supercharging growth and productivity.

Get the latest Gold price here.



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