Renowned hedge fund manager Jeffrey Vinik has dismissed the pot stock craze, describing cannabis investment as overrated and likely to suffer from squeezed margins. Speaking on CNBC’s Squawk Box on January 10, Vinik also revealed that bitcoin currently accounts for “zero percent” of his investment portfolio.

Returning to the hedge fund scene after a five-year hiatus, the Tampa Bay Lightning owner, who also holds minority stakes in the Boston Red Sox and Liverpool Football Club, believes that an entry rush into cannabis investments will create a situation where market demand is overserved, and margins become too small to be profitable.

In his words:

I won’t say zero, but my guess is that they’re overhyped. There’s going to be too much competition, margins are going to come down, [and] nobody’s going to make money.

Rosy Cannabis Stock Predictions Versus Vinik’s Bearish Outlook

If anyone has worthwhile experience in predicting stock performance, it would be Vinik whose hedge fund Vinik Asset Management returned an average of 17 percent per annum from 1996 to 2013. His prediction, however, is in stark contrast to the cannabis industry outlook put forward by Vivien Azer and Michael Lavery of Cowen and Piper Jaffray, respectively.

Both analysts have picked Canopy Growth and Tilray to lead the space in 2019 amidst a projected market surge that will see the sector achieve a valuation in the hundreds of billions of dollars over the coming decade.

Vinik, on the other hand, believes that such optimism is itself a cause for concern as it will lead to an unprecedented entry rush due to pot’s relatively low barrier to entry. Over time, as more and more investors come into the space and demand remains more or less stagnant, Vinik predicts that cannabis will thus become a stagnant-volume, low-margin space.

Vinik’s wider economic outlook is not quite so pessimistic, however. Speaking on Squawk Box, he revealed that believes that despite ongoing turbulence, stocks could embark on a multi-year uptrend across amidst good economic growth and low inflation. In his opinion, tech stocks specifically are in the mid stages of a bull market, which means that regardless of short-term retracements, the asset values will remain bullish in the long term.

In his words:

My belief is that we’re in a secular bull market. In retrospect — I didn’t know it at the time — it started in 2009 and if I had to guess, we’re halfway through it, driven by good economic growth and low inflation.