Seabreeze's Doug Kass on U.S. Stocks: 'I Have Been Wrong'

Discussion in 'Wall St. News' started by ASusilovic, Mar 23, 2010.

  1. NEW YORK (Reuters)—Hedge fund manager Doug Kass on Monday [March 22] said his bearish calls in recent months that the benchmark Standard & Poor's 500 stock index would decline in the double-digits are proving to be wrong.

    Mr. Kass, the widely followed founder and president of Seabreeze Partners Management, told clients in a note: "I have been wrong—at least, Mr. Market has been saying so!"

    In September, Mr. Kass told Reuters he was betting the S&P would end 2009 at about 920 and was shorting U.S. equities because "we are facing a period of disappointing economic and corporate growth." Previous Reuters Story

    But the S&P 500 index rose 23.5% last year on signs the economic recovery in the U.S. was strengthening. Currently, it trades at more than 1,162, while a recent Reuters poll found investors and strategists forecast a 10% increase from where the index ended in 2009 at 1,115.10.

    Optimism about a rebound in the U.S. labor market and profits are seen to drive stocks to their second straight annual advance. Falling unemployment also could boost consumer confidence and spur a revival in spending, a key driver of corporate profits.

    In fact, Fed officials said at their recent policy meeting that the overall economy is improving. In their statement, they said: "Information received since the Federal Open Market Committee met in January suggests that economic activity has continued to strengthen and that the labor market is stabilizing."

    "I am fully aware that my mistakes over the past few months have been numerous and far-reaching," Mr. Kass said. "Above all, I have been steadfastly skeptical regarding the sustainability of the domestic economic recovery and in the view that the foundation for a sustained move in the U.S. stock market was on shakier ground than the consensus believed."

    In a short sale, investors borrow shares in order to sell them, betting that the stock price will fall. The goal is to buy the shares back at a lower price and realize a profit on the spread between the original sale price and the cost of buying the shares back.

    Shaky, shaky, shaky ground... :cool:
  2. Kass called the March bottom with amazing accuracy. Then, like all gurus, he felt the need to call the top in the summer and was obviously very wrong. He's no different than anyone else who thinks they can predict the future.

    Props to him for admitting he was wrong, though. You don't hear that often from the guru types.
  3. Kass was victimized by reading too much Zero Hedge

    aka Zero Reliability

    Didnt kass's son also stink up the place?

    If kass was reading my thread in April 2009
    he would not be a disgraced man today.

    Here's what I posted. Behold the Modern Nostradamus

    I posted the illustration as I know the Average ET user has a reading level of 5th grade.