The founder of a well-known "Black Swan Fund" warns: The S&P 500 may plummet after reaching 8,000 points.

According to ME News, on February 18th (UTC+8), Mark Spitznagel, founder and chief investment officer of the "Black Swan Fund" Universa Investments, stated that the multi-year upward trend in US stocks is far from over—at least for now. In a recent letter to investors, Spitznagel wrote that the market will continue to operate in the "Goldilocks zone" over the next year—with declining inflation and interest rates, a slowing but not excessive economic slowdown, and a shift towards market frenzy—leading to a continued rise in the stock market that ends in a surge. However, he added that "the biggest bubble in human history" is now in its final stages. Spitznagel's hedge fund, which has been operating for nearly two decades, focuses on tail risk hedging, protecting investor portfolios from the next major crash. He stated that as long as the economy remains resilient, the stock market will continue to rise—a view he has maintained since the end of 2022. In an interview, he said that market frenzy could push the S&P 500 to 8,000 points or even higher—followed by a sharp reversal. The worrying aspect is that if the Federal Reserve maintains current interest rates for an extended period, businesses will begin to struggle to raise capital. Spitznagel stated that while the economy appears resilient, monetary policy has a lag effect, and the Fed's excessive focus on lagging indicators like inflation has become outdated. "The Fed is currently holding back, and as the economy gradually deteriorates, the market will anticipate more easing measures," he said. In this context, the stock market will climb on expectations of further rate cuts, followed by a rapid decline when the economy slows. "At some point, the Fed will be powerless to reverse the situation, exactly as happened in 2007 and 2008." (Source: ME)