Mutual Fund Morning

Try Jim Cramer's Action Alerts PLUS
CLICK HERE NOW

Prudent Bear's Tice Says the Plunge Is Coming

05/04/07 - 10:40 AM EDT

Brett Arends

Clearly, Tice isn't the only one nervous about the market. Funds under management are now $688 million, Tice says. They peaked at $702 million a few weeks ago. "Since early 2003, the S&P is up 70%, but our assets are up 40%," he says. "We have been more defensive than other bear funds because we have lost less money."

The reason? Tice isn't just betting against the stock market overall. He's also short individual stocks, including selected homebuilders, financials and consumer discretionary stocks. Some bets, particularly in the homebuilding sector, have obviously done well recently.

Prudent Bear has also invested about 18% of its portfolio in companies mining precious metals, including gold, silver and uranium. And the prices for those have been skyrocketing. "Gold is the one asset that is not someone else's liability," Tice argues. "Gold is an asset that you can carry around in your pocket, and it's of value."

Bears of all stripes believe gold will prove a "safe haven" if and when the economic reckoning arrives. The reality is that it has proven an exceptional investment over the past five years even while they wait. Part of Tice's analysis, after all, has already proven correct. Easy money has driven up the price of all assets, including precious metals. Meanwhile, America's crazy trade deficit has been slowly undermining confidence in the dollar as the world's reserve currency.

And as the greenback has slid, alternatives, including gold, have risen.

None of this has led to a dramatic market collapse yet. Tice notes that everyone in has a vested interest in keeping the game going as long as possible. "There are no enemies of asset inflation," he says. "Washington likes it. Wall Street likes it. Consumers like it." But as the sun shines on the markets around the world, he still believes storm clouds are on their way. "I am as confident as ever that we are going to be right," Tice says, though he concedes: "Things are playing out more slowly than we thought."




1 2 3 4
» Next
In keeping with TSC's editorial policy, Brett Arends doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Arends takes a critical look inside mutual funds and the personal finance industry in a twice-weekly column that ranges from investment advice for the general reader to the industry's latest scoop. Prior to joining TheStreet.com in 2006, he worked for more than two years at the Boston Herald, where he revived the paper's well-known 'On State Street' finance column and was part of a team that won two SABEW awards in 2005. He had previously written for the Daily Telegraph and Daily Mail newspapers in London, the magazine Private Eye, and for Global Agenda, the official magazine of the World Economic Summit in Davos, Switzerland. Arends has also written a book on sports 'futures' betting.

Life & Money

Mutual Fund Morning

Go To Section Home


04/13/07
Seven Reasons to Be Bearish in '07

Not even a Fed cut is going to help this market.


04/04/07
Mapping Out the Bear Tracks

Don't ignore the evidence amid so-called 'normal' volatility.


03/26/07
Bear Market Awaits Technical Confirmation

Though the charts may not say bear, the fundamentals have a say.


03/20/07
Financials Will Lead the Bear Market

Real estate issues and the financials behind them will be the market's downfall.


03/13/07
Rising Risks of Recession

GDP readings, Fed reports and subprime woes say the time may be coming between now and 2009.


03/12/07
The Bear Is Only Resting

Don't mistake recent stock strength for the bears' permanent hibernation.


05/19/08
Cramer on Top Searched Stocks: Yahoo!

Yahoo! is among the most searched stocks on TheStreet.com. Here's what Cramer had to say about the stock recently.


05/17/08
Jim Cramer's Best Blogs

Catch up on his thinking on the hottest topics of the past week.


04/26/08
Coming Week: Make or Break

Investors will have to deal with a Fed meeting and another flood of earnings and economic data.


05/19/08
Top Rocket Stocks: Ensco

Ensco International and Echelon have the potential to move higher in coming days.


04/28/08
Monday's Analysts' Upgrades, Downgrades

See who made what calls.


05/19/08
Telecom Giants See a Savior in Video

The addition of video is helping telecom companies compete against cable and satellite companies.


05/19/08
Contract Expiration Tempers Oil's Rise

The June West Texas Intermediate contract reflects selling pressure ahead of Tuesday's expiration. But stocks in the sector are generally trading higher.


05/19/08
Analysts' Upgrades, Downgrades: Amazon

See who made what calls.


Your Recent Quotes: Quote Up0 | Quote Down0
Dow S&P 500 NASDAQ
Oil*
Gold
10 Yr
0.00%
%
%
%
Data delayed 20 min
Sign up for our FREE newsletters now.

Keep on top of the market and the critical information you need to make more profitable investing decisions.

  • Cramer's Daily Booyah!
  • Before the Bell

Privacy Policy

See All Free Newsletters

Premium Stock Ideas
Access Action Alerts Plus to find out Cramer’s latest picks now!