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
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Kass: Uncertainty Prevails

This column originally appeared on Real Money Pro at 7:41 a.m. EST on Jan. 3.

NEW YORK ( Real Money) -- Tuesday was another great example of how difficult (and even silly) short-term market forecasts can be.

I frankly know few who were emboldened to get long in the dark days of last Thursday and Friday.

Although I did expand my long exposure late last week, I experienced premature disaccumulation toward the end of the day on Monday, as it was my view that a favorable outcome was in the process of being discounted.

Even though I almost perfectly forecast the timing and context of how the fiscal cliff would be resolved, I did not have the foresight to stay with many positions as I hedged out much of my long book.

I start the day in a market-neutral mode, and I have no plans to chase the market now.

Warren Buffett famously quipped, "Price is what you pay; value is what you get." And after a near-70-handle move in S&P futures since Friday's close I will take a pass on buying strength.

In looking at Tuesday's rally and the uniformity of sector performance, it seemed to me that it likely reflected more of the fact that new money was coming in than a reaction to the deliberations in Washington, D.C.

That said, buying this sort of strength is for momentum-based buyers, and I don't travel in those circles.

The fiscal cliff resolution provided little certainty to the consumer and business for the time ahead. Indeed, one can argue that, although the tail risk of going off the cliff has been removed, there is much uncertainty created for the next two months and certainly a lot more heavy lifting.

I am concerned that the multiplier being applied to the tax increases agreed to this week will be greater than many expect, serving to weigh on domestic economic growth. As well, it is also my view that the trajectory of economic growth in 2013 (and corporate profits) will also be adversely impacted by the manner in which businesses and consumers react to the tax hikes and the growing animosity and contentiousness in Washington, D.C. in the months ahead. Indeed, in the two months ahead, I fully expect the deliberations between the revenge-lusting Republicans in the House and the equally dogmatic and partisan incumbent President and Democratic Senate to have a direct and distinctly adverse impact on economic growth, confidence and profits.

Bottom line: I view the market's strength this week not as a new bull market leg but rather as something far different.

Regardless of view, these are uncertain times and the only thing certain to me is that 2013 follows 2012 and that there are 363 days left in the year.

Of that, I am very certain.

At the time of publication, Kass and/or his funds had no positions in any stocks mentioned, although holdings can change at any time.

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.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
DOW 17,390.52 +195.10 1.13%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,630.7410 +64.6030 1.41%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs