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Stocks are hovering near all-time-highs. Hedge fund chief Mark Yusko is warning that the S&P 500 is due for a 60% drop or more. In a recent video, he laid out several indicators that concern him. See more stories on Insider’s business page.
Mark Yusko doesn’t beat around the bush when talking about his market outlook.
Stocks are due for a 60% pullback or more to reach what would be considered fair value levels by historical standards, the hedge fund chief said in a May 20th episode of his market commentary show.
“I’m not saying that has to happen tomorrow,” said Yusko, the founder of Morgan Creek Capital. “But you don’t see anything in either one of those charts where you get a peak and then plateau,” Yusko said. “It’s coming.” His firm oversees $1.7 billion in assets.
Below are the charts Yusko is referring to. Essentially, they show that a variety of valuation indicators are at historically high levels. The chart on the right shows the S&P 500‘s valuation at 199% above “fair value.”