April 27, 2020

A summary of my near term (three months) expectations

It has often been said that a good forecaster is not smarter than everyone else, he merely has his ignorance better organized.

Here are my expectations for the S&P Index over the next several months:

* S&P cash currently stands at 2810.

* My "fair market value" calculation is 2800 on the S&P Inde - 18x 2022 S&P EPSe of $155/share. (Don't think precision!)

* I don't expect anything near a retest of the March lows.
(In short form, my reasons are: the level of interest rate levels, a likely flattening in the curve, the size of the Fed's bazooka, generally bearish market positioning and my confidence in the scientific and health communities). 

* However, I do have growing concerns about the Administration's ability to successfully manage (and "get to work") the aforementioned fiscal bazooka ("helicopter money") as well as providing a consistent and efficacious policy towards a national "reopening" that has the potential of pushing us back into the spread of Covid-19. On the latter point, it is my strong view that our nation's response to coronavirus has been a deadly mix of arrogance and incompetence. These factors have the potential to be the next market "stories" -- pushing stocks toward the lower end of my expected range. 

* My expected three-month S&P range is 2550 (9% below intrinsic value and current S&P cash) - 2950 (5% above intrinsic value and current S&P cash).

* I believe the downside of my three-month S&P range (2550) is above consensus.

* I believe the upside of my three-month S&P range  (2950) is also above the consensus.

I offer the above for the purposes of transparency and in order for you all to better understand my positioning (and move this afternoon). I remain optimistic about the intermediate term (one year or more out!). 


via twitter

April 25, 2020

Doug Kass talks at the 2020 CFA markets forecast event


Click here if the above video does not play

Minute mark
@34:07 Questions begin

@34:53  Has the market structure changed so that some of the things we look at are not as valid as they used to be?

@38:44 Noise factors impacting technical analysis / validity of pattern recognition?

@42:43 Pattern Recognition

@44:08 Assault on Neoliberalism and the election year?

@52:17 Surveillance Capitalism and Apple

@59:34 Interest rates - where they're at, where we're going?

@1:06:02 Gold

@1:09:49 Generational Lows and Highs 

@1:11:32 Political Polarizations

@1:15:27 Is the US the best house in a bad neighborhood? 

@1:20:58 Real Estate 

@1:28:00 Digital Transformation

@1:30:58 Bloomberg and the 2020 election

@1:32:53 Emerging Markets?

@1:34:49 Doug's Predictions

@1:37:15 Closing Comments

March 10, 2020

This is some of the worst action I can remember in my career.

History's lesson
Not that we should be beholden to history but over time, at periods of market duress like these, Black Mondays have an afternoon rally that fails and stocks close at or near their lows.
And the next day, Tuesday, the gap lower is the time to buy. 

Disasters have a way of not happening and value almost always emerges out of panic
via twitter

February 18, 2020

On Cannabis stocks

"It will not likely be until 2021 that $ will be made getting "chai" on cannabis stocks. Probably alot of money will be made next year - but not until the weak is separated from the chaff."

"2020 will be a year in which many publicly held cannabis companies will face massive cost cuts, financial restructuring and defaults/bankruptices. 

Supply/demand still way out of balance, health apps disappointing and managements still too promotional."

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