"Almost losing money every day, only profitable during turbulent times!" He said, "The 'biggest bubble' is nearing its peak."

Tail risk hedging fund "Black Swan" fund Universa's founder Mark Spitznagel recently issued a warning, stating that the current market may be in the midst of "the biggest bubble in human history".

In an interview with the media this week, Spitznagel warned that as inflation falls and the loose monetary policy of the Federal Reserve stimulates market bets for further gains, the market is in the "blond girl phase", but rate cuts could be the starting point for a major reversal.

"We are heading towards a very bad situation," Spitznagel said. He likened the current economic situation to a "super powder keg - a time bomb", believing that the government's practice of suppressing economic fluctuations is accumulating significant risks. Despite the current record highs in the U.S. stock market indices, he believes that potential risks are accumulating.

In discussions about the stock market outlook, Spitznagel's remarks always attract high attention from investors. Since founding Universa in 2008, he has earned huge profits through a series of amazing operations, including setting a "stunning record" of earning $1 billion in a day.

As a disciple of "Black Swan" author Nassim Nicholas Taleb, this mysterious quantitative investment expert employs a complex strategy. On a daily basis, this strategy incurs losses almost every day, but during extreme market volatility such as the 2008 financial crisis, the 2015 flash crash, and the 2020 COVID-19 crash, Spitznagel's strategy often works wonders.

1. This round of adjustment will exceed the Internet bubble, and rate cuts could be the starting point for a major reversal

Spitznagel points out that compared to the 1999 Internet bubble, the current market's excessive behavior is more extreme, so this round of adjustment will exceed the Internet bubble.

Spitznagel also believes that due to high public debt and high valuations, after the market adjustment, it may be more difficult for the U.S. government to implement market rescue measures.

It is worth noting that recently, several well-known bearish analysts have lost their jobs, a phenomenon eerily similar to the peak of the Internet bubble. For example:

Morgan Stanley's Marko Kolanovic also maintained a bearish stance during the AI ​​rally and eventually lost his job.

And in late 1999, a few months before the peak of the S&P 500 index, Merrill Lynch's bearish strategist Charles Clough left the company.

Spitznagel predicts that with falling inflation and a shift in Federal Reserve policy, the market may continue to rise in the coming months, even becoming more frenzied. However, rate cuts are usually the starting point for a major market reversal.

He also believes that the U.S. economy may fall into a recession by the end of this year.

2. Insightful or marketing rhetoric?

Spitznagel predicts that the stock market is about to face massive selling, with market capitalization potentially shrinking by more than half However, to be realistic, predicting when the stock market will crash is much more difficult than even hedging a portfolio crash - some industry insiders even believe that predicting when the stock market will crash is simply impossible.

Just like many fund managers and strategists always sound optimistic, for those who make money by tail risk, the rhetoric of "scaring the market" sounds like a savvy marketing tactic.

It is worth mentioning that Spitznagel joked in an interview this week:

"I think we are heading towards some very, very bad things - of course I would say that."

He added:

"You don't feel like a fool for expressing bearish views."