This Day On The Street
Continue to site
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

Kass: Bulls on Parade

This column originally appeared on Real Money Pro at 7:35 a.m. EST on Nov. 29.

NEW YORK ( Real Money) -- A number of strategists and talking heads are coming out bullish today (you all know, the cabal that worships at the altar of price momentum).

They are justifiably impressed with Mr. Market's intraday reversal on Wednesday and ability to climb through important technical markers.

I have my view whether they are right or wrong, but, regardless of that, I am not sure what the value added is in getting bullish after a 70-handle rally in the S&P 500 off of the early November lows. This is especially true in a market facing numerous uncertainties and potential headwinds.

Chase stock prices higher at your own risk. Price is what you pay, value is what you get, and after the sharp rally since a week ago Friday, the reward vs. risk has diminished greatly.

My view is that the market is now (adjusted for the rally in the S&P 500) fairly valued (1415 on the S&P 500). I continue to view the bond market, however, as greatly over valued and believe that a short bond position will outperform a long equity position in the months ahead.

That does not mean the U.S. stock market can't overreach and move higher than where I happen to think the market should be priced -- I have no concession on the market's truth -- just like it recently breached my fair market value calculation to the downside.

I start the day in a market-neutral position, and I am poised to opportunistically trade in the weeks ahead.

In doing so it is important -- at least, I think it is important -- to be emotionless, not to follow market spikes and to be willing to buy red and sell green.

And, oh, that fiscal cliff -- I am still not fearful of a lack of compromise -- it will be resolved. I have always thought so. The question is at what cost?

From my perch, the fiscal drag associated with resolution of the fiscal cliff will pose serious risks to consensus earnings estimates for 2013-2014. And, as important, it will not be anywhere near the seminal event that will unleash corporate hirings and business fixed investment.
Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.

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
Only $9.95
14-Days Free
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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs