Celebrated bear investor Bill Fleckenstein explains how he's playing the market now! Following is a summary of the main points he made on Fast Money.
What the financials will do next is anyone's guess, according to Fleckenstein but in spite of the sell-off, he thinks there remains way too much optimism in the market. "The credit bubble has burst and I don’t think investors understand just how much the housing market and speculation around the housing market drove the economy," he says.
"I expect real estate to get worse, stocks to get worse and the economy to get worse; and the three will probably feed on one another!"
As far as Fleckenstein is concerned the bulls are down and out. And he thinks tech will be the next to fall.
"In the last 90 days cell phone sales have dropped in Western Europe, the US, China and India," he says. "Anything that feeds into the chain will be hurt. Also there’s inventory building in tech as people prepare for a second half recovery that I don’t think is going to come."
Fleckenstein tells us that he's short the phone chips and networking stocks including Texas Instruments , Cisco and Juniper .
To see our entire interview with Bill Fleckenstein please watch the video!
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Trader disclosure: On June 26, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS); Finerman's Firm Owns (MO), (MSFT), (PM), (SUN), (TSO), (VLO), (AXP), (DVA); Finerman's Firm Owns SPX Index Puts; Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM); Najarian Owns (AAPL), (ANR), (CHK), (RIMM), (TSO), (XLF); Najarian Owns (MER) Puts; Najarian Owns (NUE) Calls, (QID) Calls, (SLB) Calls, (YHOO) Calls; Terranova Owns (BNI), (CME), (FXC), (LUV), (GOOG), (INTC), (IYT), (XLF), (SU), (YHOO), (FCX); Terranova Owns Dollar Index Futures
Terranova is chief alternatives strategist at Phoenix Investment Partners;; Phoenix Investment Partners Ltd. Owns (RWX), (DBC), (DBV), (IGE), (AAI), (ALK), (AMR,) (APA), BP plc, British Airways plc, (CHK), (CVX), (COP), (CAL), (DAL), ENI SPA, (XOM), Gazprom, (HA), (HES), (HOC), (HSE), (JBLU), Lukoil, (MRO), (MUR), (OXY), Petrobras Intl Fin, Petro-Canada, (PBR), Petroleos De Venezuela, (QAN), (RJET), Royal Dutch Shell plc A Shares, (SKYW), (LUV,) (SU), (TSO), Texaco Capital, Total SA, (UAUA), (LCC), (VLO)
Fleckenstein Is Short (TXN), (CSCO), (IBM)