The longer a market moves sideways, the larger the move up/down you should expect.

Hedge-fund boss who predicted ‘87 crash says get ready for some ‘really scary moments’

‘From a markets perspective, it’s going to be interesting. There probably will be some really scary moments in corporate credit.’

Paul Tudor Jones

Paul Tudor Jones, a hedge-fund luminary, said he’s stress-testing his portfolio of corporate debt because he expects a tumultuous road ahead on the back of the Federal Reserve’s apparent commitment to normalizing interest rates and buttressed by corporate tax cuts from the Trump administration.

Speaking at an economic forum in Greenwich, Conn., a hotbed for hedge funds, Jones said the Fed faces real challenges amid “the end of a 10-year run” of economic growth that many anticipate will soon come to a screeching, cyclical end.

Jones is widely credited with predicting, and profiting, from the stock-market crash on Oct. 19, 1987, which saw the Dow Jones Industrial AverageDJIA, -1.56% lose nearly 23% of its value, marking the largest one-day percentage decline for the blue-chip benchmark in its history.

The 64-year-old investor founded Tudor in 1980 and became known for trading everything from currencies to commodities. However, his record has also featured middling returns and an exodus of billions from his hedge fund in more recent years.

In the past and during his talk in Greenwich, Jones said he believes that bonds and stocks are overvalued in an environment that had been underpinned by easy-money policies from central banks across the global.