New Delhi, April 29 -- High stock valuations have investors on edge about the next stock market crash. Famed trader Paul Tudor Jones, who famously predicted the 1987 crash, isn't just worried-he's envisioning exactly how the next big one could play out.

The founder and chief investment officer of Tudor Investment, which has more than $100 billion of assets under management, Jones laid out his view of how and when the next bear market could hit and how big of a wallop it could pack. He gave this analysis during a guest appearance on Patrick O'Shaughnessy's Invest With the Best podcast.

First the good news: Jones didn't predict a crash anytime this year. Instead he mapped out a scenario in which a reversion to the mean price-to-earnings r...