Latest news with #Spitznagel
Yahoo
12-05-2025
- Business
- Yahoo
'Black Swan' hedge fund Universa reaps 100% return amid tariff chaos, investor says
By Carolina Mandl NEW YORK (Reuters) -"Black Swan" hedge fund Universa Investments posted a 100% return on capital in a turbulent April for markets as U.S. President Donald Trump's administration unveiled new tariff-based trade policies, an investor who allocates money to the fund told Reuters. A so-called tail-risk hedge fund with $20 billion in assets under management, Universa specializes in risk mitigation against "black swan" events - unpredictable and high-impact drivers of market volatility. Funds of its kind use cheap credit default swaps, stock options and other derivatives to profit from severe market dislocations, like an insurance policy. Universa's founder and Chief Investment Officer Mark Spitznagel declined to comment on the fund's performance in April. He told Reuters he believes financial markets will perform in a Goldilocks zone for a while, with the economy not growing too fast or too slow, before further turbulence. "I expect a euphoric high before it is over, but when that happens... it's going to be the worst crash I think that we will have seen in our lifetime," he said, adding U.S. stock markets could fall 80%. He said he saw April's market turbulence as a "temporary blip." Universa - which counts "The Black Swan" author Nassim Nicholas Taleb as its distinguished scientific adviser - tends to perform well when unexpected events happen, posting a roughly 4,000% gain in March 2020 as stocks worldwide sank as the COVID-19 pandemic broke out. Spitznagel said the tariffs may have a recessionary impact on the economy at a time that the Federal Reserve is keeping interest rates at historically high levels. "The Fed is way behind (the curve)," he told Reuters. "Despite a slowing economy, (Chair Jerome) Powell's holding the line." Last week the Fed held rates steady in the 4.25%-4.50% range, citing a cloudy economic outlook amid tariff threats, as risks of both higher inflation and unemployment had risen. The Fed hiked rates aggressively in 2022 and 2023 to tame a surge in inflation, a process that Spitznagel sees as the beginning of a pop in the economic bubble after years of monetary easing that drove investors to riskier assets. "This crash is going to come eventually," he said.
Yahoo
16-04-2025
- Business
- Yahoo
Hedge fund legend, who earned 4,144% during COVID, warns stocks will crash 80% and 'Armageddon' is coming
The U.S. stock market has taken a beating as Trump's tariff-fueled sell-offs continue to rattle investors. But according to one prominent bear, the worst is yet to come. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Mark Spitznagel, founder and chief investment officer of Universa Investments, warned in commentary to MarketWatch that a historic collapse may be looming. "I expect an 80% crash when this is over. I just don't think this is it. This is a trap," he said on April 7, days before Trump announced a 90-day pause on his plan to hike tariffs on most countries. The stock market recovered some losses on that announcement, but it's still a chilling forecast from Spitznagel. The S&P 500 is down roughly 7% year to date — enough to shake investor confidence — yet Spitznagel suggests that could be just the beginning of a much steeper fall. And his warnings don't stop there. 'This is another selloff to shake people out. This isn't Armageddon. That time will come as the bubble bursts,' he added. Spitznagel is no stranger to market mayhem. He gained notoriety during the 2020 COVID crash, when Universa's flagship 'Black Swan Protection Protocol' fund posted an eye-popping 4,144% return in the first quarter of that year. Today, his call stands out even among Wall Street's growing caution. Several major firms have slashed their forecasts for the S&P 500, though none approach Spitznagel's apocalyptic tone. Markets are inherently volatile. Whether or not you buy into Spitznagel's outlook, it might be a good time to consider how to diversify beyond traditional stocks. Here are three simple ways to start. Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates, recently underscored the importance of diversification — and the enduring value of one classic asset. 'People don't have, typically, an adequate amount of gold in their portfolio,' he said in a February interview with CNBC. 'When bad times come, gold is a very effective diversifier.' He suggests having 10-15% of a portfolio invested in gold. Gold is considered a go-to safe haven. It can't be printed out of thin air like fiat money, and because it's not tied to any single currency or economy, investors often flock to it during periods of economic turmoil or geopolitical uncertainty, driving up its value. Over the past 12 months, gold prices have surged more than 35%. Today, there are plenty of ways to gain exposure to gold. Investors can put money in gold ETFs or own shares of gold mining companies. They may also buy gold bullion — many online platforms offer a wide selection of gold and silver bars and coins at fair prices — and even tap into potential tax advantages through a gold IRA. Read more: The US stock market's 'fear gauge' has exploded — but this 1 'shockproof' asset is up 14% and helping American retirees stay calm. Here's how to own it ASAP Like stocks, real estate has its cycles, but it doesn't rely on a booming market to generate returns. Even during a recession, high quality, essential real estate can continue to produce passive income through rent. In other words, you don't have to wait for prices to rise to see a payoff — the asset itself can work for you. It's also a time-tested hedge against inflation. As the cost of materials, labor, and land rises, property values often increase as well. At the same time, rental income tends to climb, giving landlords a revenue stream that adjusts with inflation. Owning rental property allows investors to collect monthly rent payments, but being a landlord is rarely as passive as it sounds. Managing a property involves finding and screening tenants, collecting rent, and handling maintenance and repair requests (out of your own pocket) — and that's assuming you can save enough for a downpayment and get a mortgage to buy the property in the first place. The good news? These days, you don't need to buy a property outright to reap the benefits of real estate investing. Real estate investment trusts (REITs) provide a great avenue for those looking to gain exposure to this asset class without the large down payments or management headaches traditionally associated with real estate ownership. Alternatively, crowdfunding platforms allow everyday investors to own shares in rental properties, but this option has risks average investors should be aware of, like low liquidity and no guarantee of returns. It's easy to see why great works of art tend to appreciate over time. Supply is limited and many famous pieces have already been snatched up by museums and collectors. This also makes art an attractive option for investors looking to diversify. In 2022, a collection of art owned by the late Microsoft co-founder Paul Allen sold for $1.5 billion at Christie's New York, making it the most valuable collection in auction history. Art also has a low correlation with stocks and bonds, which helps with diversification. But it's not without drawbacks: fine art is an illiquid, high-risk asset whose value can be influenced by shifting tastes, trends and the art world's inner circle. It also requires proper storage, insurance and care — adding to the cost and complexity. It's true that investing in fine art by the likes of Banksy and Andy Warhol used to be an option only for the ultra-rich. But with a new investing platform, you can invest in iconic artworks too, just like Jeff Bezos and Peggy Guggenheim. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Yahoo
13-04-2025
- Business
- Yahoo
Stock Market Expert's Dire Warning to Investors: 'This Is a Trap'
The last two weeks of the stock market have been a roller coaster for investors due to the ongoing trade war. With the uncertainty of how the White House tariffs will impact the economy in the long run, one finance expert is telling consumers to brace for a rocky ride. Mark Spitznagel, founder, owner, and chief investment officer of Universa Investments, a hedge fund management firm based in Miami, FL, had a warning for Americans this week — the worst is yet to come. 'I expect an 80% crash when this is over. I just don't think this is it. This is a trap,' he told MarketWatch in a statement on April 7. 'This is another selloff to shake people out. This isn't Armageddon. That time will come as the bubble bursts. This is a most contrarian view right now. Promise.' Spitznagel doesn't have a prediction of when this will happen, but he believes that a crash similar to the one in 1929 is ahead. While this might seem like a negative approach — he does call himself a "professional doomer" — the stock market expert has been predicting this situation since 2023. 'We are in the greatest credit bubble in human history. And that's not my opinion, that's just numbers,' he told Fortune in August 2023. 'There is no question about the fact that we are living in an age of leverage, an age of credit, and it will have its consequences.' Spitznagel believes in the long-term success of the U.S. and recommends that people don't get caught in the storm of selling when the market is at its lowest point. Still, the warning is out there — there's still more volatility to come.
Yahoo
09-04-2025
- Business
- Yahoo
The stock market will go down 80% ‘when this is over,' says bearish investor Mark Spitznagel
One of Wall Street's most notoriously pessimistic — and successful — investors, Mark Spitznagel, said the stock-market plunge that's followed President Donald Trump's tariff rollout isn't the epic market crash he has been calling for, but rather the turmoil along the way to the big event. 'I expect an 80% crash when this is over. I just don't think this is it. This is a trap,' he wrote in commentary to MarketWatch on Monday, adding that when the real crash happens, investors will know it. After two big days of selloffs, here's what history suggests will happen next 21 stocks that Wall Street analysts now think are bargains in this year's worst-performing sector My cousin died before receiving our uncle's $2M inheritance. Will the rest of the family receive this money instead? 'I'm stuck': I'm a single mom with a 6-year-old child. What can I do to earn money fast? 5 things that make this stock-market selloff truly unusual Spitznagel is the founder and chief investment officer of hedge fund Universa Investments, which employs a strategy that aims to take positions that will benefit from rare, unpredictable but highly impactful events. It's known as a 'Black Swan' fund — a term to describe such events popularized by scientist, author and former options trader Nassim Nicholas Taleb, who was influential in the firm's strategy. Universa made headlines in the first quarter of 2020 for returning 4,144% as the market crashed in March from fears of the COVID pandemic. Spitznagel told MarketWatch that Universa is still trading this market like a crash even though he's not convinced one has arrived. 'This is another selloff to shake people out. This isn't Armageddon. That time will come as the bubble bursts,' he wrote. 'This is a most contrarian view right now. Promise.' Stocks were off session lows but posting losses in a wildly volatile session Monday that saw swings from sharp losses to sharp gains and back again. The Dow Jones Industrial Average DJIA was down more than 200 points, or 0.57%, while the S&P 500 SPX slightly recovered by 0.35%, and the Nasdaq Composite COMP was down 0.84%. The S&P 500 fell a cumulative 10.5% on Thursday and Friday after President Donald Trump last week unveiled sweeping tariff measures. The S&P 500 and other major indexes saw their steepest two-day selloff since March 2020, when stocks plunged as the COVID-19 pandemic forced an economic shutdown. Spitznagel has been calling for a bigger crash — one that would be the worst since 1929. The investor emphasized he isn't in the business of predicting the timing of market crashes. However, he has previously voiced concerns over mounting U.S. debt, which he sees posing a key risk to markets. In 2024, he warned investors about not getting caught off guard when the stock market does turn for the worse, and end up being the 'sucker' that sells when the market is down and buys when it's up. He advocated having positions agnostic to market turmoil — a difficult ask for the average person. 'We've had our clients riding this bull market for years,' Spitznagel wrote on Monday. 'All the doom and gloomers think it's over and they have this figured out. Take it from a professional doomer, they don't. And they definitely don't have the right position for it.' In a 2023 interview with Fortune, he noted that retail investors could ride out storms without needing to resort to complex trading strategies by simply buying low-cost, broad index funds, and even adding to their positions when the market is down. The key for retail is to not overextend their exposure to a point of being forced to sell at a bad time in the market. Read more: How investors are evaluating tariffs as stocks finish lower 'Frankly, I'm terrified': I'm 63 and nearing retirement. How should I invest my $80,000 inheritance? 'She has been telling him lies': My sister convinced my father to sign everything over to her. What can I do? Apple's stock is the latest to see a 'death cross,' and it won't be the last Even 'safe haven' trades like Treasurys are falling on Trump's tariffs. What does that tell investors? Sign in to access your portfolio
