"Black Swan" investors issue密集 warnings: Stock prices appear "insane"! It's time to hedge against a crash scenario.

A top economist and risk expert has said that the United States is in one of the most unstable investment environments in decades. While some investors are cheering the stock market rebound, he is focusing on the potential market crash.

"Black Swan" author Nassim Taleb recently expressed his concerns about market conditions in an interview. He said that the current environment seems similar to past crashes and added that he is focused on preparing for such events.

"We have accumulated a lot of risks," the Universa Investments advisor said last Friday. "I would say... my focus is more on hedging the eventual market crash because we are more vulnerable than at any time in the past 20 or even 30 years," he added later.

Taleb noted that despite the stock market's rise over the past year, there are still some risks in the market.

He said that stock prices appear "insane" and pointed out that most of the gains in the S&P 500 index are concentrated in a few companies related to artificial intelligence.

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However, he said it is not clear whether these companies have the greatest growth potential and pointed out the rotation of the best-performing companies during the internet bubble period. "Artificial intelligence will be the best investment. But maybe not these companies," he said.

Meanwhile, Taleb said that the US economy has been "puzzling," and it is uncertain whether some industries are overheating.

Due to the increased level of globalization since the pandemic, the world economy is also more interdependent. He pointed out that this means external shocks are more likely to spread, which is also a factor that makes the investment environment more complex.

Taleb said that the debt held by Western countries is "beyond our ability to bear," and the debt-to-GDP ratio in the United States reached 124% at the end of September. He previously predicted that if high levels of debt are combined with external shocks, it could lead to a "death spiral."At the same time, investors are emerging from a period dominated by low interest rates. He pointed out that many market participants are accustomed to shunning more "conservative" assets, and this adventurous attitude may leave traders in a vulnerable position.

"These crises occur when you least expect them," Taleb said. "I think we are very similar to the environment before past crashes, with the market becoming complacent. People have become accustomed to it. They may have taken some precautions at first, but then they threw the precautions to the wind... At this point, vulnerability will reach its maximum value."

However, Taleb and other forecasters at Universa Investments have repeatedly expressed pessimistic views on the short-term stock market and economy. Universa founder Mark Spitznagel said earlier this year that he expects the S&P 500 index to enter a "brutal rise" and then experience the worst crash since 1929, partly due to the dangerous conditions brewing in the credit market.

Compared to this pessimistic forecast, Piper Sandler said in a report on Monday that investors worried about overvalued stock markets should not sell stocks.

The investment portfolio strategy group of this Wall Street company, led by its Chief Investment Strategist Michael Kantrowitz, estimates that the S&P 500 index is overvalued by about 8%, "An 8% overvaluation is not a reason to be bearish. As long as common factors such as interest rates, employment, or inflation do not trigger a 'fear' catalyst, stocks can maintain higher valuations."

Kantrowitz said that even if the stock market is overvalued, it should continue its upward trend as long as interest rates, unemployment rates, or inflation are not imminent. "Narrowing credit spreads, a robust labor market, and continued GDP growth are all signals that investors should remain bullish, even if the stock market valuation is slightly high."