This blog post originally appeared on RealMoney Silver on April 1 at 7:44 a.m. EDT.

This morning, I have decided to move both my short and intermediate-term market ratings to an all-out buy -- my new market rating is now 10-10! -- based on the following considerations:

  • While I initially expected a 5% to 10% decline in the S&P 500 this year, my new year-end S&P target is 1,666, for a gain of 26% from current levels. I might be low.
  • The writedown of toxic paper throughout the world's financial system has dramatically overstated the severity of the credit issue. In fact, I fully expect, in the fullness of time, that a write-up of balance sheet assets in 2009 at the major money center banks and brokers will be a contributing factor to a surprising 25%+ rise in corporate profits.
  • Shares of financials, which have been unfairly targeted by the short community over the last year (monoline insurers, banks, brokerages, etc.), could double in price by year-end.
  • I have come to the conclusion that the Bureau of Labor Statistics' inflationary readings actually understate the true level of inflation.
  • The 10-year U.S. note, with its 3.40% yield, is cheap and is likely to provide an overall return of close to 10% in the next 12 months.
  • Oil prices, stimulated almost entirely by managed commodity trading funds and hedge funds are destined to drop below $50/barrel by year end.
  • The Federal Reserve, Treasury Department and the Administration are now on the paths of thoughtful policy and regulatory reform, which will lead to the Long Boom of 2008-2015.
  • It is now clear that the U.S. economy will not enter a recession as housing has definitely bottomed and the consumer (who is pent-up, not spent up) appears capable of leading a domestic growth surge in 2008-2009.
  • Speaking of housing, the weakened U.S. dollar has begun to result in a dramatic increase in foreign purchases of high-end homes on the East and West Coasts. The record inventory of unsold homes should be cleaned up by the fall, and, by spring 2009, a large increase in Wall Street hiring suggests that a housing shortage is possible within 12 months.
  • The enormous buying power of sovereign wealth funds will be released over the next three months -- after Dubai bids for the entire capitalization of the SPDRs (SPY) and PowerShares QQQ (QQQQ).
  • A reversal in psychology in the credit markets and an improvement in consumer confidence will result in a quantum increase in business spending plans, leading toward a vigorous rally in technology shares that could even overshadow the upside move in financials.
  • I now believe that Senator McCain will win in a landslide in November 2008. The Democratic Tsunami will be abruptly derailed and so will the politics of trade protectionism and the notion of higher tax rates for individuals and corporations.
  • Effective next Monday, I have been hired as a CNBC contributor. As such, I plan to expand (with gusto and dogma) upon my bullish market view from my CNBC perch in Englewood Cliffs, N.J., over the next six months. (I am hopeful that my old Wall Street Journal moniker, "The Bear of Boca," will soon be changed to "The Bull of Brooklyn," which is where I was born.
  • I am now in total agreement with CNBC's Dennis Kneale, who thinks that stocks have never been cheaper, and I am even moving close to Ben Stein's bullish mantra, as it is now clear that the market correction was really caused by short sellers, traders and the economist at Goldman Sachs (GS) -- all of whom were seeking to capitalize on silly and fictional headlines.
  • I am pleased to announce that I will be hosting a new CNBC show (at 4:30 p.m. EDT daily and after "The Closing Bell") called "The Mad Bull." The show will be entirely dedicated to the new bull market I envision.
  • I am also pleased to announce that I am writing a new book in collaboration with The Wharton School's Dr. Jeremy Siegel. It will be entitled Dow 56,000: The New Strategy for Profiting from the Coming Rise in the Stock Market and The Long Economic Boom of 2008-2015.

I believe so strongly in the above considerations that I have decided to convert my dedicated short funds into long-only partnerships.

April Fool's Day!

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

At time of publication, Kass and/or his funds were short the iShares Lehman 20+ Year Treasury Bond and Retail HOLDRs stock and SPDRs calls, 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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