Tony James, chief operating officer at private equity giant Blackstone, told CNBC on Monday that stocks could see a bear market this year.
James said on "Squawk Box" the market is "very fully valued" according to "every historical norm."
"I think you could easily see a 10 to 20 percent correction sometime this year," he said. "We've got 5 [percent] already."
The was on the cusp of a 5 percent pullback from all-time highs after Friday's bloodbath on Wall Street.
That means James thinks the S&P could fall 15 percent more from current levels.
James said it's not a question of whether the stock market is at fair value. The case is "if you want any return, it's the only place to go," he said.
A decline of at least 10 percent from recent highs is definition of a correction. A plunge of at least 20 percent from recent highs is the definition of a bear market.
The last 5 percent pullback was about a year and a half ago; the last 10 percent correction was mid-2015 to early 2016; while the last bear market was during the 2008 financial crisis.
The S&P 500 was off to a roaring start to 2018 before last week's stumbles.
However, the index was still up nearly 30 percent, as of Friday's close, since Donald Trump was elected president in November 2016.
James said the Republican tax law could indeed provide stimulus to an already strengthening economy, which could actually be a negative for stocks.
"I'm not sure we need stimulus right now," he said. "If you're worried about interest rates and inflation, the stimulus could be the thing that tips us over into a rate spike."
Rates in the bond market have already been spiking. The 10-year Treasury yield Monday morning was trading around 2.8 percent, around four-year highs.
But James did question how much the corporate tax cut will actually boost companies' bottom lines. "One thing the market is over-estimating is much added earning that tax cut is will bring."