NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Silver readers in "The Edge," his daily trading diary.This week, Kass wrote about how he'd been overly bearish during the past year, about a favorite insurance stock and about what could be a significant event for Yahoo!. Please
Originally published on March 2 at 7:01 a.m. EST. I am going to make today's opening missive brief, but my message is significant. The reality is that over the past 12 months I have been far too cautious and dogmatic in my ursine outlook. I moved too far off the reservation and stuck to my views even as cyclical economic conditions changed. (One doesn't have to look much beyond the ISM strength to support the statement that domestic growth has improved markedly.) In support of my bearish investment view, I offered what I thought were a series of logical arguments on why my secular concerns would produce nontraditional challenges to the notion of a smooth and self-sustaining economic recovery that was the foundation of the bullish cabal's baseline case. The fact is, the cyclical recovery in corporate profits has been so strong as to offset some of my concerns. I am not a perma-bear -- I am in this game to make money for my investors and for RealMoolah's subscribers. Nevertheless, my musings over the past year might have led subscribers to conclude that I am indeed a perma-bear. Nor am I bullish. Those nontraditional headwinds, frequently discussed on The Edge, are ever-present and are value-destructive and must be monitored closely as to their effect on the cyclical recovery. Moreover, I remain of the view that some portion of the recovery in the economy, in general, and in personal consumption expenditures, in specific, relates to "recession fatigue." It is important to recognize that numerous sectors in the economy are still operating well below long-term trend lines, and that, in all likelihood, this setup will support some further aggregate growth in the months ahead, even though the nontraditional threats remain a cloud over intermediate-term growth.
Thank you to RealMoney's Doug Kass, for helping me call a once-in-a-generation bottom in March 2009.As I watched Jim's observations on the " Be Afraid" segment on "Mad Money" last night -- as I do every night -- I heard his message loud and clear (as he heard mine almost two years ago) and took it to heart. That message is that there is no place for dogma ... especially when investing in the stock market. (This precept applies to both bullish and bearish thinking.) As I mentioned previously, there are economic, profit and market challenges aplenty (that I have been chronicling on The Edge). And while Mr. Market might have some work to do on the downside in the near term, I for one will take advantage of opportunities that are presented in a correction ... on the long side.
Insurance in the Headlines
Originally published on March 3 at 8:18 a.m. EST. This morning, Citigroup names XL Group ( XL) its best idea in the PC underwriting space based on its strong excess capital position, strong management and a derisking and rebuilding of its franchise. From my perch, Platinum Underwriters Holdings ( PTP) is a cheaper insurance stock. At the time of publication, Kass was long Platinum Underwriters Holdings.
Yahoo! Close to Pulling Out of Japan
Originally published on March 2 at 6:38 a.m. EST. Last night, Reuters reported that Yahoo! ( YHOO) is close to exiting its joint venture, Yahoo! Japan. I value Yahoo! Japan at more than $9 billion, or $7 a share to Yahoo! (pretax). Hopefully this is the beginning of the company's disaggregation. At the time of publication, Kass was long Yahoo!.