Doug Kass fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- How Kass is totally not like Mae West in stocks and bonds.
- How Kass has been trading lately.
Click here for information on RealMoney, where you can see all the blogs, including Doug Kass'--and reader comments--in real time.
I'm the Polar Opposite of Mae West When It Comes to Stocks and Bonds
Originally published June 23 at 9:03 a.m. EST
"I only like two kinds of men, domestic and imported."
-- Mae West
When I was a "yute" in this investing game, I was told that lower oil prices would be a boon to the consumer and retail activity as well as a spur to economic growth.
Now, with the price of crude oil dropping to new multimonth lows and apparently mired in the $40-to-$50 range for quite a while going forward, another quiver in the "short bonds" arrow has been put in place.
While I believe the risk/reward is about 3 to 1 or 4 to 1 negative for equities, it is my view that over the intermediate term the risk/reward is something like 6 to 1 or even 8 to 1 negative on bonds.
I am negative on both stocks and bonds and at the polar opposite to Mae West, who only liked two types of men -- domestic and imported (see quote above).
My Trading and Investing Activity in Thursday's Session
Originally published June 23 at 8:04 a.m. EST
The terra is getting less firma.
From my perch, the market is growing more fragmented and unpredictable. Leadership is narrowing, new highs are moderating and volume is declining.
I would reduce time frames and raise cash to larger-than-normal levels. Though I am living in the ursine world, most should not short unless you are very disciplined.
Besides travelling I spent most of Thursday adding to my large net short exposure by virtue of more individual shorts and the reduction of some longs.
There were some buys, however: I added to Twitter (TWTR) - Get Report and established a new long in Dillard's (DDS) - Get Report , which I placed on my Best Ideas List and which managed a $2 advance in the trading session. (Nordstrom (JWN) - Get Report also leaped ahead Thursday). I continue to increase the size of my Energy Select Sector SPDR (XLE) - Get Report investment.
Importantly, I reduced Allergan (AGN) - Get Report back down to tag ends after its $33 rise in a few short weeks. I hope I can replace the stock I sold at lower levels. AGN remains on my Best Ideas List and is my favorite large-cap long for 2017.
My bottom line is that, in S&P terms, the market holds about 3.5 times more downside than upside--an unfavorable reward v. risk.
Position: Long TWTR large, AGN small, JWN, DDS, XLE, SDS large, SDS calls, SQQQ small; short SPY.
Action Alerts PLUS, which Cramer manages as a charitable trust, is long AGN.