Prudent Bear's Tice Says the Plunge Is Coming

He believes the canary in the coal mine will probably be the dollar. He expects the greenback to tank as international investors start to lose faith in the U.S. credit bubble. He also predicts the Federal Reserve will respond by jacking up interest rates to protect the dollar from complete collapse. That, of course, would bring the credit market to a grinding halt. We'll see.

In September 1996, when the fund was not even a year old, former Fed chairman Alan Greenspan issued his famous warning against "irrational exuberance" on Wall Street. When Greenspan spoke, the Dow stood at around 6,400. The blue-chip index has more than doubled since then.

Prudent Bear? It's down from $8.40 to $5.70 over the same period. Waiting for the meltdown is an expensive business.

Of course, when you factor in fund dividends, investors have done better. Over the past 10 years they are only down about 5%. And that masks some pretty wild moves. Since the fund hit rock bottom in early 2000, investors have actually doubled their money. Not bad for a bear fund.

And that has attracted investor interest. Prudent Bear's fund sales hit $170 million last year, almost as high as their peak during the market collapse of 2002. The figures come from industry monitors Financial Research Corp.