The stock market is still an unsafe place for investors as quantitative easing, by which central banks boost the supply of money attempting to kick-start economies, is unlikely to work, Hugh Hendry, Chief Investment Officer at Eclectica, told CNBC.
Hendry also disagreed with Warren Buffett's view, recently expressed to CNBC, that inflation is likely to be as bad if not worse than in the 1970s.
"I've honestly never known a time of near-universal conviction that we have to worry about inflation today," Hendry told "Squawk Box Europe."
"For quantitative easing there's no successful precedent. It has never, ever succeeded," he added.
He is buying government bonds, shorting stocks and "can't buy enough dollars." Taking the contrarian view to the majority of speculators creates opportunities, Hendry added. "Gold, silver, I'm shorting them right now."
Inflation will become a reason to worry for authorities again at some point, but they should think about combating deflation right now, Hendry said.
"It is coming back in the future. All I'm saying it is just an unprofitable proposition at the time," he said. Betting on inflation is as if "we got a new book and we've read the last page. But if you read the entire novel, it's a different journey."
Despite Tuesday's strong rally in the stock markets, shares are not a good investment, said Hendry, who continues to bet on government bonds.
"I dare you to touch an equity today. Tell me you're making money on equities," he said.
The unravelling of the crisis is likely to continue as world economies re-adjust after the cheap credit bubble has burst.
"We were deluded by easy finance and as that easy finance is being removed, we're shocked," Hendry, who said his investment fund made a 32 percent return last year and is up 10 percent this year, said.
The market has grown for about 30 years and for a long period, it will be "going nowhere," Hendry said, likening this period with the one after the crash of 1929 and with the crisis in Japan at the beginning of the 1990s, despite claims that this time it is different because the world has evolved.
"I am saying that we are no different. Here we are, surrounded by technology and computers, and we are no different."