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Doug Kass: In Cash and Waiting for the Big Short Trade

January 13, 2011
Market has been rallying these days. The street is taking good news at face value, and taking bad news as excuses for more and longer Fed’s easy money policy. It is hard to find a bear among the participants. Yesterday, as I wrote in this piece, even Meredith Whitney could not find anything that could derail the stock market’s climb, short term. “People want to be happy”, she said.

Doug Kass of Seabreeze Partners has a pretty good record in calling the market tops and bottoms. His most recent success was calling the market button in 2010. But as you will see in the last video clip, he probably has called the top of the year too many times in 2010.

Sticking to his bearish sentiment, now he is suggesting economy may not be as rosy as it seems. Late last month, he questioned whether the underlining recovery is real recovery, or simply just “recession fatigue”. He sees the economy facing headwinds from this point on: fiscal in-balances, inevitable high marginal tax rates, a weak housing market, gridlock in congress that won’t address the unemployment issues, rising interests, higher commodity prices, and high corporate gross margin that is about to reverse to the mean.

He does not see the market keeping on rallying. Here is an interview on December 27, 2010:

























And just a couple of days ago on Jan. 6, 2010, he disclosed that a large portion of his portfolio was in cash and “waiting for the big short trade”, as he said. He outlined the risks to U.S. economic growth: “Wimpy Syndrome” in Congress, Structural Job Loss, Rising Interests, and “Screwflation”:

























This morning, he defended his bearish calls during the 2010 rally and tells CNBC he sees opportunities in commodities going forward.

Making macro-calls is a dangerous business, Kass found himself in a rather uncomfortable position in this clip.

He disclosed that he made good money in 2007, 2008, and despite being bearish, he was positive in 2009.

























About the author:

guruek
Mike Havrilla is a pharmacist, freelance writer, and index developer for ETF Innovators, which creates new global equity indexes for licensing and commercialization as exchange-traded funds (ETFs). He has been investing since August 1997 and freelance writing for investors since April 2007 with a focus on the healthcare sector and ETFs. Mike holds Doctor of Pharmacy and Bachelor of Science (Biology) degrees from the University of Pittsburgh and is a licensed pharmacist. Visit Mike Havrilla's website www.etfinnovators.com.

Visit guruek's Website


Rating: 2.6/5 (7 votes)

Comments

kvalueinvest
Kvalueinvest - 3 years ago


"Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in the corrections themselves."

Peter Lynch. Legendary Investor

dealraker
Dealraker - 3 years ago


I think we should put Doug Kass and Dick Bove together in a room and lock the door. They both crave media attention and they often say dead opposite things on the very same days........and it must sell well or it wouldn't be there for viewers--- now would it?

A few hours later we'd open the door and find them both nearly lifeless. Why? Because nobody would have paid attention to them---- neither one of them would listen to the other---- would they? A few hours with no audience would wipe them both out.

It must be the voices; the beards; the seeming sophistication; or something.

paulwitt
Paulwitt - 3 years ago
I saw some CD's getting 1.25%..... and to think, you get paid while you wait!

dleshner1
Dleshner1 premium member - 3 years ago


Dougie Kass has one of the WORST track records for a year now. He is a joke and most traders laugh at him. He is the definition of a media whore. Sorry Meredith Whitney, he even takes that title from you. Kass has been dead wrong since last summer. Anyone that followed his advice is out of the game now. Sure is easy to go broke trying to short what Dougie thinks are "market tops".
paulwitt
Paulwitt - 3 years ago
In 2009 the XLF was down 80% from its 2007 highs. At this time the XLF is down 56% from its 2007 highs. So everyone can decide where the markets valuation is and if we are coming out of recession.

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