Wall Street Journal Interviews David TicePrudent Bear's Approach Delivers Payoff
Tice's Pessimism Leads to Gains, But No Second Date
By RESHMA KAPADIA
Wall Street Journal
March 27, 2008; Page C2
Sometimes, a grim view of the economy can cramp your style. During a recent first date, says David Tice, manager of Prudent Bear Fund, he made the mistake of sharing his bleak investment outlook at dinner. No second date followed. "You can almost feel the energy go from the room," Mr. Tice said about when he offers his take on the economy.
But as an investor, Mr. Tice is on a roll. By selling short and maintaining a relentlessly downbeat look at the market, his $1.2 billion mutual fund is up more than 15% in the past year, almost 20 percentage points ahead of the market. His bad-news-bear approach is just getting started...........
.
.
.
What stocks do you own?
We are still long precious-metals stocks -- gold, silver, uranium. We like several Canadian companies -- like Silverstone Resources -- with market caps between $50 million to $5 billion. We're trying to identify companies that are still under-recognized and have operating leverage. We are also invested in copper company Capstone Mining, which we have seen a 10-fold profit in but still like.
As a contrarian, does it trouble you that everyone likes gold, too?
A little bit. We have less invested than two years ago. Over five years, gold has risen a lot. However, we still think it has a long way to run. The Dow Jones [Industrial Average]-to-gold price ratio has ranged from 43 to 3, and right now it's near 15. I think it will go to single digits.
https://online.wsj.com/article/SB120657899202267247.html?mod=MKTW&ru=MKTW