Kass: The Parable of the Mustard Seed

In conclusion, I am not yet in a rush to buy aggressively, but I am increasingly confident that investments made in the next three to six months will look terrific one to two years from now.

I am also convinced that the current negative groupthink on the part of the hedge fund community (and others), which is manifest by their current low invested positions amid fear of further investment losses and additional redemptions, will cause them to miss the bulk of the early advance in equities when it comes. As such, the potential is for hedge funds to become the new marginal buyer that is capable of extending the market's initial gains in 2009.

Shopping lists should now be made for both holiday gifts and for stocks, as they are both being discounted.

Doug Kass is the author of The Edge, a blog on RealMoney Silver that features real-time shorting opportunities on the market.

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Know What You Own: Doug Kass is currently short the iShares 20+ Year Treasury Bond (TLT), which operates long government ETF category, and some of the other ETFs in its field include the iShares 7-10 Year Treasury Bond (IEF), UltraShort 20+ Year Treasury ProShares (TBT), iShares 10-20 Year Treasury Bond (TLH), UltraShort 7-10 Year Treasury ProShares (PST), PowerShares 1-30 Year Laddered Treasury (PLW) and SPDR Lehman Long Term Treasury (TLO). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.

At the time of publication, Kass and/or his funds were short the iShares 20+ Year Treasury Bond, although holdings can change at any time.

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.

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