This morning David Tice, manager of the Prudent Bear Fund, was on Squawk Box with his usual doom and gloom. I'm not sure it makes sense for him to be the one to articulate the bear case.
I tend to think that successfully arguing the bear case requires having been correctly bullish at least once. I cannot find a time where he has been correctly bullish (anyone feel free to comment if I have missed this).
I wouldn't think his TV persona would be the best thing for marketing the fund. The fund is meant to go the opposite way of the market. I specifically have not looked at its returns for this post. Regardless of anyone's outlook for stocks or the economy, there is value in having something that will go up if the market goes down. Maybe even enough value for you to own his fund or not, that is a subjective decision.
If he were bullish, it would not change the role that the fund would play in a diversified portfolio. Since he has always been bearish no matter what, there is no way to know when he will be right the next time.
He was obviously right in 2000 but since the S+P bottomed at 775 on October 9, 2002 it has rallied 64%. I don't believe he caught any of that in his commentaries (again, correct me if I am wrong).
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3 comments:
Roger,
I am not a doom & gloomer but I am having trouble finding good value in the markets I follow.
Also, while not a hard core contrarian, I must admit that this morning's article in the WSJ about how the individual investor is returning to the stock markets makes me wonder if it's time to go to a little more cash...
Regards,
Jim in LV
I view that type of news as an indicator not a decsion maker. I tend to be closer to (not full blown mind you)contrarian thinking with this.
The type of investor mentioned often is late but can still catch plenty of lift.
"I tend to think that successfully arguing the bear case requires having been correctly bullish at least once."
Laughed out loud when i read this. Very good. Not trying to be a smart ass. I'm sure David will be right eventually, though maybe for the wrong reasons. With any luck (for him) his fund will be short everything in sight.
I have my own concerns about the downside, as everyone seems to right now. Fortunately, i have a lot of cash right now. Unfortunately, not for reasons having anything to do with the market. So, I am well prepared for anything that goes on in my personal life, but poorly prepared to react to market conditions.
Really enjoy your blog. Thanks for the time and effort.
Kris
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