The Millionaire Heat Electulative Fund manager Paul Tudor Jones believes that the conditions are set for a powerful increase in equity prices before the Haussier market is made up.
“I guess I think all the ingredients are in place for a kind of blow,” said Jones on “Squawk Box” of CNBC on Monday. “History rhymes a lot, so I think that a version of this will happen again. If anything, it is now much more potentially explosive than 1999.”
Tudor Investment’s founder and investment director said today’s market recalled the configuration leading to the explosion of the Dotcom bubble at the end of 1999, with spectacular gatherings in technological actions and an increase in speculative behavior. Jones said that circular transactions or funding from suppliers that occur in the space of artificial intelligence also made it “nervous”.
The Nasdaq Composite, heavy with technology, rebounded 55% compared to its April background to consecutive record heights. The rally was motivated by giants of mega-capital technology, who have invested billions in AI and are appreciated with the potential of this emerging era.
Nasdaq composite year to date
The difference by 1999 is the American fiscal and monetary policy, noted Jones. The federal reserve had just started a new softening cycle, while the rate increases were on their way before the market summit in 2000. The United States now managed a budget deficit of 6%, while in 1999, there was a budgetary surplus in $ 99,000, said Jones.
“This budget monetary combination is a drink that we have not seen since, I guess, the post-war period, in the early 1950s,” he said.
The long -standing investor has highlighted the tension at the heart of each bull market at an advanced stage – the wishing to capture excessive gains and the inevitability of a painful correction.
“You have to go up and down the train fairly quickly. If you just think of the Taurus markets, the biggest price assessments (occur) the 12 months preceding the summit,” said Jones. “This is a sort of doubles whatever the annual averages, and before that, if you do not play, you miss the juice; if you play there, you must have really happy feet, because there will be a very great end.”
Certainly, Jones does not provide an immediate slowdown. He thinks that the Haussier market always has room to run before reaching its final phase.
“We will need a speculative frenzy to raise these prices. It will take more retail purchase. This will take more recruitment from various others from short hedge funds, real money, etc.”, he said.
He said he would have a combination of golden stocks, cryptocurrencies and Nasdaq technologies by the end of the year to take advantage of the rally fueled by the fear of missing.
Jones took on glory after predicting and benefiting from the 1987 stock market crash. He is also the co-founder of the Association for non-profit just Capital, which classifies public American companies according to social and environmental measures.
Correction: the Nasdaq composite, heavy with technology, rebounded 55% compared to its April fund to consecutive record peaks. A previous version has destroyed the percentage.
