Apple, Bank of America, JPMorgan, Citigroup: Doug Kass' Views

NEW YORK (Real Money Pro) -- Doug Kass shares his views every day on RealMoneyPro. Click here for a real-time look at his insights and musings.

 


 

Paring Back on JPM, BAC and C

Originally published at 11:04 A.M. EDT on Thursday, June 18, 2015

I've decided this morning to modestly pare back my money-center bank holdings --Citigroup  (C), JPMorgan Chase  (JPM) and Bank of America  (BAC) -- in light of the following factors:

  • Very bullish investor sentiment surrounding the group (possibly as good as it gets).
  • A marked recovery in all three stocks' price since mid-March, both absolutely and relative to the market.
  • My expectation of a slower-than-consensus rise in interest rates over the balance of the year and into 2016.
  • Somewhat lower-than-projected credit demand (commercial, industrial and housing).

Still, Citigroup, JPMorgan and Bank of America will remain on my Best Ideas List given their superior intermediate-term prospects and relatively low valuations.

In other words, my thesis on the group remains intact.

Position: Long C, JPM, BAC
 

Takeaways and Observations 

Originally published at 5:47 P.M. EDT on Thursday, June 18, 2015
  • As we used to say in the harness racing business, the markets were up "from flagpole to that's all."
  • All of the move was accomplished in the first 2-3 hours.
  • Nice catch up in REITs, utilities and other bond-equivalent sectors (as suggested in my morning post). That said, bond yields were a bit higher too!
  • It was the Russell's turn to outperform this time, with the biotech/healthcare-laden Nasdaq righ there.
  • I was surprised by the magnitude of the market advance, but, again, it appears slow economic growth and dovish policy are the ingredients of this move.
  • Biotech en fuego, again.
  • Confidence in buying the dips is the outgrowth of today.
  • Twitter is already starting to implement changes.
  • More activist news after the close, this time Conagra (CAG).
  • Volume was still low, but above the recent levels.
  • The move will underscore the bull market in complacency. (Perhaps I am the complacent one, complacently short!)
  • Input from my Board of Directors meeting I attended today (the company operates globally) underscores a still-slow trajectory in world economic growth. But our company is on top of costs and employees are working very hard and very long hours, so profitability is fine.
  • I thought Apple's underperformance today warranted mentioning. Sticking with my short thesis.
Position: Short SPY, AAPL
 
 

For Apple Heads

Originally published at 9:58 A.M. on Wednesday June 17

Apple  (AAPL) says the Apple Watch is finally available for purchase in Apple stores.

Yawn!

Position: Short AAPL

At the time of publication, Kass and/or his funds were long C, JPM, BAC and short SPY and AAPL, 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.

More from Investing

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

McDonald's Criticized for Not Doing More in Wake of Sexual Harassment Claims

McDonald's Criticized for Not Doing More in Wake of Sexual Harassment Claims

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Finding Stocks Right for You: Cramer's 'Mad Money' Recap (Friday 8/25/18)

Jim Cramer: The 10-Year Yield Could Go to 2.75%

Jim Cramer: The 10-Year Yield Could Go to 2.75%