Mark Spitznagel says he the stock market to rally further before we hit the "worst crash since 1929"

Mark Spitznagel says he the stock market to rally further before we hit the "worst crash since 1929," per BI.


Spitznagel is known on Wall Street for his bearish outlook, particularly highlighting concerns about the potential bursting of the largest-ever debt "bubble," although he does not specify a timeline.

His firm's primary strategy, focused on tail-risk hedging, is designed to benefit from sharp market declines through derivative contracts, providing a form of insurance-like protection for investors' portfolios. The fund gained significant attention for its 4,144% return during the 2020 stock market crash, an example of a so-called black-swan event.

The 2020 crash caught virtually everyone off guard, and Spitznagel avoids making specific market timing calls. However, in a Business Insider interview, he outlined his belief that the current stock-market rally will eventually lead to a historic crash triggered by the bursting of a credit bubble.

Since last year, Spitznagel has been warning about the interest expenses the US government will face on its record $35.5 trillion debt, which grew significantly when interest rates were low. Other hedge fund managers, such as Ray Dalio, have also expressed concerns that substantial debt repayments could hinder economic growth.

Despite his warnings, Spitznagel is not attempting to predict the exact timing of the crisis or subsequent stock-market repercussions. He clarified, "It's not fair to call me a perma bear." While he did sound the alarm in interviews and a January 2023 investor letter seen by Business Insider, he also acknowledged the possibility of a rally before any crash.

"And my simple reasoning for that is that we are witnessing the bursting of the greatest credit bubble in human history, and crashes are direct consequences of the bursting of credit bubbles."