David Tepper of Appaloosa Capital Management was on CNBC yesterday morning sharing his views on the market. He thinks the market is poised to do well: the economy is doing well, housing is coming back, Australia, Japan, and other countries continue to ease adding further fuel to the bullish fire. David points out that the deficit is shrinking rapidly and will be under 100 in the next few months. He thinks the worry of the Fed unwinding is way overblown. He goes on to describe how there is $400B from the Fed as part of QE that will look for a home and he thinks this among other things is a strong reason that stocks will continue to rise. He goes on to talk about how we are now at nearly an all time high for equity risk premiums and that has historically been a pre-courser to strong subsequent returns. He goes on to talk about how they are long Japan and has been since the beginning of the year. He thinks the index overall is pretty cheap they think the S&P is trading at 13x on next year's numbers. His biggest position is Citigroup. He also has some money across some other banks and doesn't own commodities since he thinks the USD will continue to strengthen. He thinks that commodities will likely be strong into 2014 after the US economy gets more strength. He also shared his thoughts on Apple and thinks they will likely perform in-line with the market. If they don't show new innovative products or iterate on existing products in the fall he thinks they will likely sell off pretty fast.
David thinks debt/GDP will continue to come down over the next couple of years but 10 years from now there could be a real issue as entitlement spending continues to come on ramp due to increasing retirements, etc. Overall he thinks we are in the early stage of the recovery and the economy and markets have some room to run.
Here is part one of the interview:
Here is part two of the interview: