June 18, 2014

Doug Kass says its not too late to reduce US Stock market holdings

Doug Kass summarizes his views as the following

-    Fear has been driven from Wall Street and there is no concern for downside risk.

-    Global economic growth is falling short of earlier forecasts, while a number of regions are flirting with deflation.

-    While the shoulders of economic growth have relied on central banker policy, in the absence of regulatory and fiscal reform, QE's impact is now materially moderating.

-    S&P profits are estimated to have risen by only about 10% in 2013-14, against a 38% rise in the S&P Index. (The difference is the animal spirits' impact on rising multiples, something everyone now accepts, but none anticipated 18 months ago).

-    Though fundamentals remain soft, (with sales and profit growth muted), bulls are self confident in view as share prices propel ever higher.

-    Bullish sentiment (measured by Investors Intelligence bull/bear spreads, etc) is at a historical extreme.

-    Shorts are and out-of-favor, endangered (and ridiculed) species.

-    There is less to valuations than meets the eye.

I would strongly consider reducing exposure to the U.S. stock market. I swear its not too late!

via http://www.thestreet.com/story/12742083/1/kass-turn-turn-turn.html