I continue to be amazed how very few money managers within the investment industry are willing to turn bearish. Even some of the hard core bears who have been calling for a stock market crash over the last few years have turned bullish. Expecting a “steady 7-8% return” from the S&P. Exactly at the wrong time.
Particularly in today’s extreme speculative overvaluation environment driven by a massive infusion of credit into our financial system. Diluting everything from simple P/E ratios to more complex valuation metrics. Making today a perfect case study of human psyche at market tops (just as in 2000 and 2007). Here is a hint, the mindset is identical.
David Tepper, founder of the $20 billion Appaloosa Management hedge fund, told attendees at the SkyBridge Capital SALT 2014 conference, “I’m not saying go short. I’m just saying don’t be too fricking long right now.” Tepper is putting his money where his mouth is; he has cut his equity exposure to 60 percent, from 100 percent, in the past six months.
WOW. Only 60%? Incredible. While David is not saying “Go Short”, I have no problem with coming out and saying just that. Just remember…. timing, proper trading and risk management techniques become crucial in such an environment.
While I will not divulge exactly when the bear market of 2014-2017 will start in a public forum, you can learn the actual date by clicking HERE.
I will say one thing. Those expecting a steady return of 7-8% are in for quite a shock.
