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May 27, 2020  

Tice Betting Virus Will Boost Gold, Silver

Prominent stock market bear David Tice has lined up a bullish bet on precious metals companies via his latest hedge fund.

Tice this month partnered with precious metals specialist Garic Moran to form Moran Tice Capital, which will invest on the premise that the coronavirus pandemic will lead to a prolonged global recession and higher inflation. The new entity, which has begun trading, taps a number of investors from TG Moran Capital, a hedge fund firm Moran had been running since 2016.

Moran handles the bulk of the firm’s trading from Atlanta, while Tice, based in Dallas, heads marketing.

Similar to his strategy at his predecessor firm, Moran takes long positions in the shares of companies involved in the supply chains for silver and gold — one area of his expertise. Tice chips in on the investment front by evaluating the stocks of companies early in the production pipeline, chiefly mining operations

The bet is a value-oriented one that counts on the stocks of mining companies and refiners to rebound following a punishing few months in which the pandemic slowed or halted production. Separately, the fund invests about 5% of its assets in bitcoin, another asset Moran and Tice expect will increase in value as fiat currencies are devalued by rising inflation.

Moran Tice Capital had just $12 million under management in its sole fund on May 1, but Tice expects his Rolodex of investors to take interest. He plans to market more broadly once restrictions related to the pandemic have eased. The operation also runs separate accounts.

A frequent presence on CNBC, Tice is well known for his grim outlook on the stock market, proclaiming in December, for example, that it was too dangerous to invest in equities. That view served him well leading up to the 2007-2008 financial crisis, when his Prudent Bear Fund performed strongly.

Before starting the new firm with Tice, Moran traded his own money, mostly investing in commodities including gold and silver. Though his returns are undisclosed, they are believed to be relatively uncorrelated to the S&P 500 Index. Earlier, Moran spent 10 years at equity-focused shop Hawkeye Partners.