Wall Street’s well-known bearish investor, Mark Spitznagel, forecasted an 80% crash in the stock market, following President Donald Trump‘s tariff rollout.
What Happened: Spitznagel, the founder and CIO of hedge fund Universa Investments, shared his bearish perspective on the stock market on Monday. He suggests that the current market drop post President Trump’s tariff rollout is not the significant crash he anticipates, but a precursor to a more severe event, reported MarketWatch.
Spitznagel, recognized for his bearish market outlook, said, “I anticipate an 80% crash when this is over. I just don’t think this is it. This is a trap.” He added that investors would be cognizant when the real crash occurs.
The ‘Black Swan’ investor has earlier expressed worries over escalating U.S. debt, which he perceives as a significant market risk. In 2024, he cautioned investors about the peril of being unprepared when the market takes a downturn.
He urged investors to retain positions unaffected by market chaos, a tough task for the average individual. He stressed, “Take it from a professional doomer, they don’t. And they definitely don’t have the right position for it.”
Spitznagel informed MarketWatch, “This is another selloff to shake people out. This isn’t Armageddon. That time will come as the bubble bursts.” The investor added, “This is a most contrarian view right now. Promise.”
Why It Matters: Spitznagel has spoken about the popping of the market bubble on previous occasions too. In a conversation with Fortune published earlier this month, the investor stated, “That’s what we should all be concerned about right now—the largest bubble in human history popping.”
This prediction comes in the wake of a tumultuous period for the stock market. On Monday, the S&P 500 officially entered a bear market territory, plummeting more than 20% from its recent highs due to investor panic over U.S. trade tariffs announced last week by the Trump administration.
CNBC’s ‘Mad Money’ host, Jim Cramer, also expressed skepticism about Monday’s market rebound, calling it “strange” following nine consecutive down days in futures trading. These events provide context to Spitznagel’s prediction and highlight the potential risks facing investors.
The S&P 500 SPY dropped 9.5% in the past 5 days following President Trump’s announcement of broad tariff measures. It closed 0.23% lower on Monday at 5,062.25.
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