US stocks may surge another 20% before historic crash, says ‘black swan’ fund Universa
By Davide Barbuscia
New York (Reuters) -Market Euphoria, the tail risk protection fund Universan Investments, according to a global stagnation, may carry our stocks to us 20% higher before causing collapse on a 1929 accident scale.
The Benchmark S&P 500 won approximately 13% this year, and last week, the Federal Reserve broke a new record on Monday after the first time since December.
The Central Bank has shown that more interruptions are likely to balance a weak labor market that could add and expand the Wall Street rally.
For Mark Spitznagel, Universa’s chief investment manager and founder, stocks can roughly rise rather than existing levels, which can take about 6,653 points up to 8,000 points.
However, since the US economy is still expected to shake hands under the burden of high borrowing costs, it warns that this rise will be followed by a historical accident.
“I’m waiting for an 80% accident … But only after a big, euphoric, historical rally,” Spitznagel said in an interview. “I argue that we are in the middle of this (rally), not in the end.”
Miami -based Universan is a $ 20 billion Hedge Hedge Fund, specializing in protection against “black swallow” shocks, using financial tools such as credit default swaps, stock options and other derivatives that have gained value during excessive market protrusions. Since its establishment in 2007, average capital return has been over 100%.
Investors use such tail -risk funds as insurance, as they carry small costs with small costs that lead to performance until disaster multiplies. Universa proved the point that emerged as one of the major winners in the midst of the market chaos, which was released by Covid-19 pandem in 2020.
“Universa is the most hostile expression of the market and customers use us to be longer … Paradoxical.” He said.
Spitznagel said last year that investors should seize the “Goldilocks” moment for the markets caused by the expectations that the FED could domesticate inflation without harming the economy, and that he would build more before led to an euphoria accident.
In addition, later last year, in a separate interview in which the Fed began to alleviate monetary policy, a US stagnation is close.
Although the economy has continued well since then, Spitznagel argues that since 2008, ultra loose monetary policy has been supported by excesses and the higher the full impact of the higher rates following the pandema has not yet been felt.
