- Robert Herjavec expects stocks to fall another 20% to 30% before the market downturn ends.
- The "Shark Tank" star flagged high levels of fear, uncertainty, and doubt among investors.
- Herjavec noted small businesses are facing labor shortages, and COVID-19 has sped up tech adoption.
Beaten-down US stocks are likely to tumble again before the current sell-off ends, Robert Herjavec warned in a recent Fox Business interview.
"We think there's still about 20% to 30% of bottom to come," the "Shark Tank" investor said. The higher end of his estimate would put the benchmark S&P 500 index at about 2,900, and the tech-heavy Nasdaq index at 8,500 points — their lowest levels since the pandemic tanked markets in the spring of 2020.
"There's a lot of FUD in the market," Herjavec explained, using an acronym for fear, uncertainty, and doubt.
Indeed, the S&P 500 and Nasdaq have slumped 13% and 23% respectively this year. The downturn reflects the Federal Reserve raising interest rates in a bid to curb soaring inflation, supply-chain disruptions sparked by Russia's invasion of Ukraine and the COVID-19 pandemic, and mounting concerns of a global economic slowdown.
Herjavec is the CEO of Cyderes, one of the world's largest cybersecurity companies. He also holds stakes in dozens of private enterprises, and underlined the challenges facing them during the Fox Business interview.
"Small business don't know what to do," he said. "Interest rates are going up, but the bigger issue is getting workers."
"They just can't get workers, they can't get people to show up," he continued. "It's going to take a few months for that to work itself through the system."
Herjavec also emphasized the need for hospitals and other organizations to modernize their systems and embrace cloud computing to protect themselves from cyberattacks. Moreover, he described the pandemic as the "greatest accelerator of business cycles in history."
"Cloud, e-commerce, digital infrastructure — we all knew that was going to happen," he said. "We didn't think it was all going to happen in two years."
Herjavec isn't alone in predicting further pain for the stock market. Michael Burry, the fund manager of "The Big Short" fame, recently suggested the S&P 500 could sink below 1,900 points.
Jeremy Grantham, the GMO cofounder and market historian, echoed Burry's prediction for the S&P 500, and warned the Nasdaq could plummet nearly 75% to 3,100.
