This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Kass: Harder Than the Average Bear

A description of what has happened in the past and what is now happening is easy; how to respond tactically and how to adopt a reasonably accurate vision of the future are much more difficult.

Positives and Negatives

The largest positive is that most now believe that the Fed and Treasury are pushing on a string as investment, economic and profit expectations have begun to adjust to reality:

  • The Cassandras -- Nouriel Roubini has guest hosted CNBC's "Squawk Box" on three occasions in the past six weeks and is now touring the globe to standing-room-only crowds as an economic consultant! -- are now out in force.
  • The discredited Polyannas -- even "Steady Eddy" Ken Fischer and many other permabull managers are suffering and are getting redeemed! -- are in hiding, however, nowhere to be seen, and, they, too, have turned their back to Goldilocks, as the NBER yesterday put an exclamation point on the U.S. recession.

The largest negative is that stocks are still reacting poorly to weakening results, and those negative but lagging fundamentals will likely to be with us for some time to come.

We all recognize that, in the fullness of time, an unprecedented amount of stimulus will, well, stimulate! The only question is when.

My view is that it is simply too hard to have conviction until we meet the following conditions:

  • stability returns to the hedge fund community, as redemptions slow down, some large hedge funds fail, and money is re-circulated to other investment managers;
  • the slope of the domestic economy's downturn is better understood, as the possible recovery is seen with better clarity; and
  • the volatility in the capital markets diminishes.

Until the above three conditions get resolved, we are likely to be stuck in a broad trading range of plus/minus 10% to 15% for the short term.

We remain in an exquisite backdrop for traders but a difficult and frustrating setting for investors, in which it may be too late to sell and too early to invest for the long term.

At some time in the future (possibly sooner than later), a historic buy-and-hold opportunity will be in front of us.

The current test for investors is to remain solvent until that time is near.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon purchases by customers directed there from TheStreet.com.


Know What You Own: Doug Kass alludes to the turmoil in the financial sector, and some of the survivors in this field include JPMorgan Chase (JPM - Get Report), Wells Fargo (WFC - Get Report), Bank of America (BAC - Get Report), Citigroup (C - Get Report), Royal Bank of Canada (RY - Get Report), Bank of New York Mellon (BK - Get Report) and Toronto-Dominion Bank (TD - Get Report). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.


Doug Kass writes daily for RealMoney Silver , a premium bundle service from TheStreet.com. For a free trial to RealMoney Silver and exclusive access to Mr. Kass' daily trading diary, please click here.

Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BK $39.75 -0.15%
BAC $15.31 -0.71%
C $51.00 -0.37%
JPM $59.55 0.02%
RY $59.65 -1.88%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs