“We Are In Irrational Exuberance”: Mike Novogratz Warns Stocks Are “Unhinged From Reality”

Hot on the heels of his CNBC interview in which he praised both bitcoin and gold, predicting that in a world where central banks are doing nothing but printing money “gold is going to take old highs and keep going”, billionaire investor Mike Novogratz, Galaxy Digital founder appeared on Bloomberg TV, where he essentially confirmed what we have been saying for years: that the stock market has become totally “unhinged from reality” as it rises higher due to now relentless central bank intervention, and said that small investors should get out before it crashes.

“We are in irrational exuberance – this is a bubble,” he told Bloomberg TV on Friday adding that “the economy is grinding, slowing down, we’re lurching in and out of Covid, yet the tech market makes new highs every day. That’s a classic speculative bubble.”

Echoing what BofA CIO Michael Hartnett said on Friday, when he cautioned that the disconnect between macro and markets has never been greater, which however is to be expected now that “government and corporate bonds have been fixed (“nationalized”) by central banks, so why would anyone expect markets to connect with macro, why should credit & stocks price rationally“, Novogratz – like Stan Druckenmiller and David Tepper – has been sounding alarms about the stock market for months, yet the S&P 500 index has inched higher, erasing losses spurred by the coronavirus pandemic and notching its best quarter since 1998.

While so far Novogratz’ warnings have fallen on deaf ears, with Robinhooders clearly chasing momentum in such mega-bubble stocks as Tesla…

… whose market cap is now greater than that of Ford + GM + BMW + Daimler + Volkswagen combined…

… the man who made a killing buying bitcoin and ethereum ahead of the herd, said that the surge in equities, especially tech stocks, reminds him of the rally in Bitcoin prices in 2017, when the cryptocurrency went from $8,000 to almost $20,000 within a couple months due to retail interest… before crashing just as fast. It now trades at roughly half the price it reached during the December 2017 peak.

Of course, there is the possibility that Novogratz is merely talking his book, admitting to Bloomberg that he largely missed out on the tech-stock rally, and has been investing instead in gold and Bitcoin, which are also benefiting from the liquidity propping up the stock market.

Then again, with gold the best performing asset of 2020 we won’t begrudge him for being right.

“We’re at really dangerous valuations on the growth side, on the tech side,” he said. “If it’s Zoom or Tesla or Beyond Meat, whatever stock has a story, everyone’s rushing in. That gets me worried.”

Watch the full interview below: