Trying to Predict the Market? Five Pros Place Their Bets.
Did the plunge in the stock market two weeks ago leave you wondering what to do? Did the subsequent days of roller-coaster markets make you even more confused? Many money managers claim to have the winning strategy. Of course, they disagree. Here are five who are staking big bucks on their predictions.</br></br>David W. Tice, president of David W. Tice & Associates, manages the Prudent Bear mutual fund, started in 1995, and the Prudent Global Income Fund, launched in 2000. They have a combined $1 billion under management. The Bear fund aims to profit from a market downturn by betting that U.S. stocks will fall, a strategy known as "shorting." The Global fund is structured to benefit from a weakening U.S. dollar and rising gold prices.</br></br>The recent downturn is proof that easy money has helped prolong a period of financial prosperity, says Tice, who thinks a stubborn bear market is likely settling in. Tice admits he has seen red in recent years; the Bear fund posted losses in 2003 and 2004 but has recorded modest returns since. He says he underestimated the willingness of mortgage lenders to do business with higher-risk borrowers. But as lenders begin to pay the price for those risky loans, Tice says he is bulking up on short positions on financial institutions, as well as other companies that depend on access to credit. "We think this could be a 10- to 15-year decline," he said.</br></br>David Poiesz, head of the growth-equity investment team at OppenheimerFunds, manages the $1.3 billion Oppenheimer Growth Fund and co-manages the $2.8 billion Oppenheimer Equity Fund.</br></br>Some investors, he says, have too much money invested abroad after chasing higher returns in emerging markets. He views the recent market turmoil as a healthy reminder of the risks overseas, and says U.S. investors might find safer options at home.