Davos WEF

Paul Tudor Jones says this 'crazy' stock market run reminds him a lot of early '99

Key Points
  • Paul Tudor Jones said at the World Economic Forum that the stock market today reminds him of early '99.
  • "We are just again in this craziest monetary and fiscal mix in history. It's so explosive. It defies imagination," he said.
  • Asked if he wants to get off the train in the bull run, Jones said, "Not really. The train has got a long, long way to go if you think about it."
  • However, Jones warned that the "curveball" to derail the bull market could be the outbreak of a new coronavirus.
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Why Paul Tudor Jones says the markets remind him a lot of early 1999

Billionaire investor Paul Tudor Jones said the stock market today is reminiscent of the latter stages of the bull market in 1999 that saw a giant surge that ultimately ended with the popping of the dot-com bubble.

"We are just again in this craziest monetary and fiscal mix in history. It's so explosive. It defies imagination," Jones said on CNBC's "Squawk Box" on Tuesday at the World Economic Forum in Davos, Switzerland. "It reminds me a lot of the early '99. In early '99 we had 1.6% PCE, 2.3% CPI. We have the exact same metrics today."

"The difference is fed funds were 4.75%; today it's 1.62%. And back then we had budget surplus and we've got a 5% budget deficit," Jones added. "Crazy times."

Asked if investors should sell now to avoid a blow-up like the one that took place in March of 2000, Jones said, "Not really. The train has got a long, long way to go if you think about it."

The legendary hedge fund manager and trader noted that the Nasdaq Composite more than doubled from a similar stage to the dot-com bubble top. "That's a long way from now. At the top theoretically, rates [would] be substantially higher."

The stock market hit a peak in 2000 before the dot-com bubble burst. The tech-heavy Nasdaq Composite approached 5,000 in early 2000 then dove thousands of points, crushing investors.

Jones, founder and chief investment officer of Tudor Investment Corporation, warned that the new "curveball" to derail the bull market could be the outbreak of the coronavirus.

"That's a big deal. If you look at what happened in 2003 ... stock markets sold off double digits. If you look at the escalation of the reported cases, it feels a lot like that," Jones said. "There's no vaccination. There's no cure. ... If I was an investor, I'd be really nervous."

The virus, stemming from Wuhan, China, has killed six people with confirmed cases in China totaling nearly 300 as of Monday, less than a week before Lunar New Year, when millions of Chinese travel at home and abroad.

The Centers for Disease Control told Reuters Tuesday that a traveler from China was diagnosed with the first U.S. case of coronavirus in Seattle. 

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Watch CNBC's full Davos interview with legendary investor Paul Tudor Jones