The U.S. stock market has been regularly setting new records in recent months, and the rally doesn’t seem to be waning anytime soon. However, investor Mark Spitznagel believes that a major turning point is just around the corner.
In a recent chat with The Wall Street Journal, Spitznagel predicted a major sell-off that could lead the stocks to lose half of their current value, if not even more. He calls it the “greatest bubble in human history,” considering the fact that the government’s high debt would make the prospects of a successful rescue highly unlikely.
According to Spitznagel, the stocks will continue their rally for several months on the back of cooled inflation and incoming rate cuts by the Federal Reserve.
Spitznagel drew parallels to the dot-com bubble that saw internet-related stocks balloon before the market crashed and wiped out all the gains. But this time, the consequences will be far more serious.
“I think we’re on the way to something really, really bad — but of course, I’d say that,” Spitznagel said.
Spitznagel is known for making billions from market crashes and other unforeseen events that had major effects on the stocks. This included the 2008 financial crisis, the 2015 Flash Crash, and 2020’s pandemic market meltdown. It remains to be seen whether he is in for another big payday.