Apple, Caterpillar and the Constant Terror Threat: Doug Kass' Views

Doug Kass shares his views on why he's still shorting Caterpillar and Apple and why investors aren't as safe as the markets assume them to be.
By Doug Kass ,

Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings.

Recommended Reading (Part Deux)

Originally published at 1:51 PM EST on November 11, 2015

Check out The Wall Street Journal's review of the iPad Pro from Apple (AAPL) - Get Report .

Position: Short AAPL

Caterpillar Execs Predict a Slow Crawl in 2016


Originally published at 1:14 PM EST on November 11, 2015

Executives from Caterpillar (CAT) - Get Report spoke at the Baird Industrial Conference today and reaffirmed 2016 sales-and-profit outlooks.

They also said that:

  • the resource sector should be about 10% lower in 2016 (down from a low base this year)
  • the construction sector will likely be flat to down 5% next year
  • energy and transportation will be down 5% to 10%, mostly due to oil and gas weakness

Position: Short CAT (small)


The Constant Risk of Terror

Originally published at 10:12 AM EST on November 14, 2015

I begin every day by asking three important questions. One among them is this: In a paperless and "cloudy" world, are we as investors and citizens as safe as the markets assume?

I've posed this question in my Diary on at least 10 occasions in the past year, as it has been a frequent concern of mine. On Friday, in Paris, we were reminded again that we live in an open society and, as such, we are exposed to ISIS jihadists who, according to a definition at About.com, believe that "an Islamic state governing the entire community of Muslims must be created, and that this necessity justifies violent conflict with those who stand in its way."

Osama bin Laden made several statements that resonate on days such as today:

"We stress the importance of martyrdom operations against the enemy."

"These operations are being prepared and you will see them in your heartland when they are ready."

"Jihad will continue even if I am not around."

It is next to impossible to combat the ISIS punks who are committed to inflicting violence on those who stand in their way. I recently invoked George Orwell's 1984 to explain how equity markets are broken, but Orwell also had words on the subject of terrorism that ring true:

"The object of terrorism is terrorism. The object of oppression is oppression. The object of torture is torture. The object of murder is murder. The object of power is power. Now do you begin to understand me?"

The horrific events of the past 24 hours speak for themselves. Terrorism -- like the horror we experienced 14 years ago on Sept. 11 -- cannot be measured or quantified in market or economic reactions; it is simply a troubling reminder of a constant risk to a civilized society.

Unfortunately, this is the "new normal." There is a sense of hopelessness that has descended over Paris and the rest of the free world.

On a more personal level, Friday's horrible events opened wounds that I have shared with all of you before (and that many others have suffered, too) in the loss of Chuck "Brown Bear" Zion to al-Qaeda in 2001. It makes me sick beyond measure.

As I have pointed many times, I have feared the exposure of our free society to acts of terrorism for some time. As citizens and as investors, we are simply not as safe as the markets assume us to be. I will deal with the markets Monday morning but, for now, let us mourn the victims of Friday's horrible attack in Paris.

"I'm in a world apart

A world where roses bloom

And when you speak

Angels sing from above

Every day words

Seem to turn into love songs

Give your heart and soul to me

And life will always be

La vie en rose."
-- Edith Piaf, La Vie en Rose

At the time of publication, Kass and/or his funds were short AAPL and CAT, 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.

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