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Satori's Dan Niles: S&P 500 will fall in 2022, likes Google, Facebook and cash
Widely followed hedge fund manager Dan Niles predicted Wednesday that the $S&P 500 Index (.SPX.US)$ will decline in 2022, as the Federal Reserve is forced to raise interest rates and stock valuations come further off of all-time highs.
"My favorite investment idea right now is cash," the founder and portfolio manager at Satori Fund told CNBC.
In terms of individual stock picks, Niles pointed to Google's parent company $Alphabet-C (GOOG.US)$ $Alphabet-A (GOOGL.US)$ and Facebook's parent $Meta Platforms (FB.US)$, which he says provide growth at a reasonable price.
"Those are great names. The names you want to be scared about are the ones that have no earnings and are valued off of revenues," he said. "Those are the stocks that are going to have huge troubles as rates continue to ratchet up."
Niles argued that signs of weakness have been popping up in the equity markets for the past several weeks, with indexes like the Russel 2000 falling dramatically over that span.
"Underneath the surface, there's a lot of damage being done and people are just continuing to crowd into some of the biggest names," he said.
Detailing his prediction for 2022, Niles projected that the Fed will be forced to raise rates to counteract inflationary pressures. This, in turn, will push stocks off of lofty valuation levels, which reached a peak above figures seen during the dot-com bubble of the late 1990s and early 2000s.
Meanwhile, for the end of the year, Niles contended that most fund managers are "either window dressing or tax-loss selling," which means that value stocks will have trouble finding support during December.
Niles has long supported FB and GOOGL. See what tech giant he previously labeled "the most overpriced tech stock."
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Krishias Future : Satoshi ? Ohhh, Satori's Dan Niles ... I thought it was Satoshi.
No more doom & gloom stories for me. I'm in a good, positive chapter right now. Don't need all the sourness ... Omicron stories are enough to give me that headache.
I'll put some Foo Fighters - Here Goes My Hero, and relax for the day.
BLACKER-ALX : Someone needs to remind Niles that we're still in the midst of a tech boom. This is not 1999 or 2000. Not by a long shot.
Brandon Loo BLACKER-ALX : Its worse than 1999/2000 bubble. On all acconts.
There are thousands of overvalued crap companies now.. that are generating $.50 in revenue by burning $1 in expenses.
areecep Brandon Loo : Thousands is a exaggerated number. But it is odd.
Micah Hicklin : Instead of a triple crown hedge fund star Dan Niles is a triple clown...
... hedge fund skank. Every time he comes on TV spewing his ilk investment advice I have to go take a shower.
ZenBunny5 : The party is over and Niles is right. I'm at 90% cash across the board on all my market investments and waiting it out through 2022. A Global equity bear market is underway. Tread carefully. Remember there will always be fake bounces followed by a lower burn. I don't care about the Warren Buffett strategy, I made my money in these markets and now I'm going to be comfortable in cash.
Myrrh ZenBunny5 : Username checks out.
Regret oneself Myrrh : It’s so ironic i cant tell if he’s joking or not
lululalabb : There is zero chance of a rate hike!! The economy is deteriorating rapidly, there is massive deflation and an out of control Omicron variant spreading. We need negative rates and more QE!!!
Peacefulnne lululalabb : Rate hikes cannot and will not solve an inequality and debt trap/bubble. In fact, rate hikes make it worse. You'd just be subsidizing the transfer of rich people out of overvalued stocks into yields.
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