David Tepper is decidedly optimistic about the equity markets and sees ‘overwhelming’ signs that they will remain pumped up in the future. Tepper, founder of Appaloosa Management, was speaking on CNBC ‘s Squawk Box, said that the bullish trends are so pronounced that he is nervous to short anything.
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David Tepper Bullish Everywhere
This is not the first time Tepper has expressed such views. He is known for being a long-only investor. David Tepper explained that he is not just bullish in US but almost everywhere in the world. He mentioned that he has been long Japan since the beginning of the year and it has been doing well for his funds. Tepper’s Palomino Fund, AUM $5.5 billion, is up 10.5 percent as of March 31, according to HSBC Hedge Weekly.
Excess of Money In The System
He said that the whole world is conducting rounds of monetary easing. Korea, Australia, EU and Japan all have kicked off massive easing programs in the past year that are still in play. David Tepper said that in US, autos and housing have shown big improvements, adding that there are not enough people to employ in housing. Tepper said that the quantitative easing in US has generated $400 billion for investors and it has to go somewhere, people will invest their money and it won’t be in bonds, this huge stash of cash is likely to go into equity markets.
He said that he is not worried about a tapering effect and the markets should not be as well. However if there is not a true taper, the markets could go back to the second half of 1999 and in that event shortsellers would need a shovel to get them out of their graves.
Apple, Do Something
On the subject of Apple Inc. (NASDAQ:AAPL), one of Appaloosa’s top holdings, Tepper said that the company needs to introduce something new that can revolutionize the brand once again. Appaloosa Management was one of the few hedge funds which added to its existing holding in Apple Inc (NASDAQ:AAPL) in Q4 last year. Appaloosa bought 391,473 shares of the tech giant in the fourth quarter, the only other value investor who has raised his stake in the company is David Einhorn of Greenlight Capital.
As Smart As You Are Stupid
On the topic of Loeb’s very recent activism at Sony, Tepper said that Loeb is a very smart investor and he has known Dan for a long time now. David Tepper said that Sony in a way opened the door for Loeb, and agreed that there are lot of companies in Japan that are in need of changes, corporations like Sony and Japanese real estate players, all could improve with restructuring.
David Tepper said that Loeb’s strength is that he is familiar with his pitfalls and weaknesses, so he knows how stupid he can be which makes him all the more smart.