‘80% Crash Ahead,’ Says Noted Market Bear Spitznagel
Despite recent market turmoil following President Trump’s tariff announcements, legendary “Black Swan” investor Mark Spitznagel believes the worst is yet to come – but not before stocks potentially reach new highs. The Universa Investments founder maintains that recent selloffs are merely “head fakes” on the path to an eventual 80% market collapse that would dwarf the 2008 financial crisis.
“This is another selloff to shake people out. This isn’t Armageddon,” Spitznagel told MarketWatch on Monday. “That time will come as the bubble bursts.” His contrarian perspective comes as major indexes experienced their steepest two-day decline since the March 2020 COVID crash.
Trending World News Headlines:
- Jim Cramer Predicts ‘Black Monday’ Crash
- Nationwide Unrest Grows as Trump-Musk Protests Spread
- Streets Fill With Protesters in Anti-Trump ‘Hands Off’ Movement
- Markets Tumble, Protesters Flood Streets Over Tariffs
- ‘Cancellation’ Drove Us to Crypto, Says Eric Trump
Euphoric Highs Before the Fall
While Spitznagel has earned a reputation as Wall Street’s preeminent pessimist, he has actually maintained a bullish market stance since 2022. “I’ve been calling for a blow-off euphoric high for two and a half years,” he explained in a Friday interview with Fortune. “I’m still waiting for that. I think it’s still probably going to happen.”
This perspective places him at odds with increasingly bearish Wall Street sentiment, with some analysts now estimating recession probabilities as high as 50%. Spitznagel believes current market conditions, including the Fed’s dovish pivot, have created a temporary “Goldilocks zone” that could fuel further market gains before the inevitable collapse.
“You’ve got these conflicting crosscurrents of soft landing, easy Fed. And soft landing turns to hard landing, easy Fed. [Then] you’ve got hard landing, panicking Fed. And that’s a crash,” he told Fortune, outlining what he sees as the likely progression toward market disaster.
Black Swan fund manager, Mark Spitznagel says stocks to go down 80% when all is said and done.
— Heisenberg (@Mr_Derivatives) April 7, 2025
But this current drawdown is NOT the start of it. Not just yet. Calls this a trap. pic.twitter.com/SD15x728Vl
A Strategy That Thrives on Chaos
Spitznagel’s Universa Investments specializes in tail-risk hedging, a strategy that positions for rare, catastrophic events while allowing clients to participate in market upside. This approach delivered spectacular results during the COVID market crash, with the fund returning an astonishing 4,144% in the first quarter of 2020.
“We’ve had our clients riding this bull market for years,” Spitznagel noted to MarketWatch. “All the doom and gloomers think it’s over and they have this figured out. Take it from a professional doomer, they don’t. And they definitely don’t have the right position for it.”
The fund’s strategy was influenced by Nassim Nicholas Taleb, the mathematician and author who popularized the concept of “Black Swan” events – unpredictable occurrences with severe consequences. Spitznagel continues to position his fund for an eventual crash while capturing bull market gains.
Stock market will go down 80% ‘when this is over,’ says this bearish investor https://t.co/zjjlaymFOj
— MarketWatch (@MarketWatch) April 7, 2025
The Debt Bubble Time Bomb
Central to Spitznagel’s catastrophic prediction is what he describes as “the largest bubble in human history” – a massive expansion of debt stressed by the Federal Reserve’s aggressive 2022-2023 rate hikes. While the Fed has since pivoted to rate cuts, he believes the lagging effects of monetary tightening are still working through the system.
“That’s what we should all be concerned about right now—the largest bubble in human history popping,” he warned Fortune. When this occurs, Spitznagel expects a crash far more severe than the 2008 financial crisis, with markets potentially declining by 80%.
He points to slowing economic growth, cooling inflation, and falling bond yields as warning signs that the economy is “slowly turning like a tanker” toward trouble. “As that accelerates, we really need to be on the lookout,” he cautioned.
Advice for Ordinary Investors
While Spitznagel’s hedge fund employs sophisticated strategies unavailable to most investors, he has previously offered practical guidance for individuals. In prior interviews, he suggested retail investors could navigate market volatility by purchasing low-cost, broad-based index funds and adding to positions during downturns.
The key, according to Spitznagel, is avoiding overextension that forces panic selling during market declines. This balanced approach aligns with his view that timing market crashes is nearly impossible – even for professionals.
“I think the market’s going to crash, like, 80%,” he told Fortune, while emphasizing he isn’t in the business of predicting exact timing. This macabre forecast comes with a silver lining for patient investors – the opportunity to potentially capture additional upside before the eventual collapse.
As markets digest President Trump’s tariff policies and volatile trading continues, Spitznagel’s unconventional perspective serves as both warning and opportunity for investors navigating increasingly uncertain financial waters.
Trending World News Headlines:
