Sartori Fund founder Dan Niles told CNBC on Thursday that there is further downside for the market in 2022. In December, Niles warned that the S & P 500 could take a 20% hit in 2022 , with a decline in tech stocks being a major contributor to the pullback. He hasn't backed away from that call, saying Thursday that his fund had nearly as many short positions as long positions. "You have to believe multiples are going to compress, unless you believe inflation is done and the [Federal Reserve] is done," Niles said on CNBC's " TechCheck ." Companies that don't yet turn a profit are particularly at risk, he said. However, Niles said there are some places in the market that should hold up better or even move higher during the downturn. His top picks for 2022 include two Big Tech names in Facebook-parent Meta Platforms and Google-parent Alphabet . "They're trading at multiples that are one to two points above the S & P. They've got massive cash flow, really good profit margins, really strong growth. The multiples are depressed because of all this regulatory risk, etcetera, going on," Niles said. Niles has made his name as a tech investor, but he said that people should look outside that sector for solid returns in 2022. "Our best long ideas are in energy and in financials because that's kind of the flip side of the coin, if you will. Because we think oil's going to go a lot higher this year, and we think interest rates are going to go higher," he said. Niles also said that older investors closer to retirement should consider holding a significant amount cash in their portfolios.
Investor Daniel Niles.
John Chiala | CNBC
Sartori Fund founder Dan Niles told CNBC on Thursday that there is further downside for the market in 2022.