Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

United States on the Verge of an Explosion of Greatness!

Economics / US Economy Jan 22, 2013 - 09:07 PM GMT

By: Bloomberg

Economics

David Tepper, founder of Appaloosa Management, told Bloomberg Television's Stephanie Ruhle on "Market Makers" today that he's "going to come out of the closet right now...we are bullish... This country is on the version of just an explosion of greatness. Do you like that? Explosion of greatness."

On how he founded Appaloosa, Tepper said, "after you work on Wall Street it's a choice, would you rather work at McDonald's or on the sell side? I would choose McDonald's. Over the sell side."


Tepper on what he's going to do this year in terms of investing:

"I am going to come out of the closet right now...we are bullish. David Tepper has never been bullish."

On why he's bullish now:

"Everything lines the right way. I am saying that for someone in my office because we play Scrabble and he hated the word I used last night...If you look at the markets, they are trading at a really low multiple. 13 handle this year, 11 handle next year on the S&P. You have unprecedented money creation here and you have Japan who went to 2% target last night. You basically have the competing assets. Junk, I rallied already 40 basis points this year. 567 or some ungodly number like that. If you look at the multiple on that compared to the alternatives to anything in credit, there's nothing close. There's never been this big of a gap in the history of my life at least."

On why now is a good time to be long:

"Listen, you're sitting here in a 2% to 3% growth situation. You have some very interesting news last week. The Republicans are not going to play with the debt ceiling. If they pass legislation on Wednesday, you probably have five months of relative quiet. So three months extension plus two months they can play games to extend it further. You really have a little bit of change in attitude that you will probably not have a debt ceiling fight. There is no major negative. You have these earnings, this money growth. You have the Japanese coming on top. There is no other choice out there. You really have not had this money supply push on a relatively good economy. I do not think it is really a steaming pile of garbage, using the G word instead of another word."

On when we'll see the shift from credit into equities:

"You saw some of the shift into equities earlier, mutual fund flows. I know people are looking for this great shift. But you don't have to have the shift. You just have to have all new money going into stocks...People make money, they invest money. There is incremental money that people save. The shift will be in new money. And there will be a shift in old money. Pension managers and others are really off sides in how they are set up. Whether you believe a Goldman Sachs report that they're underweighted by under 20% in equities, which is just huge. Insurance companies underweighted in equities. Just incredible underweights. So I think either you will have a shift or you will see all incremental funds move into the equity market over the course of this year. And then I think you will have a retail shift this year too at some point."

On the credit market:

"It is tight. You know, I have shorted tight markets before. I have shorted full markets before. I do not want to take off my clothes on TV because your viewership will go way down if I do that. I think you will get tighter. You will go very full to extreme value in credit. We have traded before in credit at 200 handle in the junk bond index. We're probably still in 400 handle. There is room to move there. I don't like it because of the absolute yield. I do not like it because I do think it is a full market and I don't like it because I think equity will give you a bigger return. If you short that you do it at your own peril. I think you can still make money of it. There is so much cash out there. People need incremental return and they're not going to get into the Treasury market. They will not get in mortgage market. There will still be moving in the credit markets, but it is by far inferior to the equity markets. Not even close."

On whether Europe should trade tighter than the U.S.:

"Look, it's a credit by credit situation if you're talking about corporate credits. It doesn't make sense for Europe to generally trade tighter than the U.S in anything. This country is on the version of just an explosion of greatness. Do you like that? Explosion of greatness. I told you, I am like a big Charlie Daniels band right now. Everyone to listen to the song 'America' by Charlie Daniels...It's a great song."

On how Appaloosa started:

"I left Goldman Sachs. I was thinking about going to another Wall Street place. I didn't want to do that. That was crazy. After you work on Wall Street it's a choice, would you rather work at McDonald's or on the sell side? I would choose McDonald's. Over the sell side."

On why he likes Citi:

"You can look at the earnings estimates on Citi. We think it has potentially 50% upside from here. We think, listen, if you ask JPMorgan, come get Jamie Dimon on the phone. Ask him if there's one franchise to like to buy in the whole world. Get him to be honest. He will say Citi's foreign business. It is unique. He cannot get into it."

On what's so unique about Citi's foreign business:

"It's steady, growing in the right places in the world. You don't have a lot of continental Europe. You're a lot in Asia and other places that are very good. Mexico. It is a very nice business there. When you talk about any one of our individual investments and our biggest investment, they are just not that big. Citigroup is 2% or 1.5%."

On whether he values liquidity:

"Yes. I value liquidity a lot. We do like liquidity. There's a measure of liquidity and I think it's not valued in the marketplace enough in general. We do like liquidity, although you have to realize that Appaloosa historically is 60% long term gains. We are long-term holders. But I value the liquidity. I value it because I was a head trader at Goldman Sachs. In 1998 i found out what liquidity was all about. There have been other things. These once in one hundred sort of things seem to keep happening every seven or eight years. I value the liquidity in that respect. I am a little more willing to be in bigger positions right now because I think it's safer right now. I think the main thing right now is to be long equities."

On whether he would go into structured credit:

"We are big CMBS players. We have the biggest book of CMBS subs. One of the biggest of books on the Street right now. It has a lot of upside. It's a big investment for us, but it has tremendous upside. We have things in structured credit. I am willing to put some money, but I am not willing to put 50% of my book in that."

On going long subprime last year:

"We were long subprime. We are a big fund. We have a lot of sh*t in there. Is that a bad word for Bloomberg?"

"I think there is probably more to go there [in the mortgage space] again because I thought there was more to go in all credit. There's probably more to go in some parts in the mortgage space because it's cheaper than corporate credit. I think money will find those spots that are cheaper. CMBS is cheap to corporate, equity is cheap to everything."

On playing the lead role in his high school performance of Bye, Bye Birdie:

"I actually played the father. I used to go around singing Conrad Birdie's part, 'One Last Kiss'...[Tepper sings]...that is not my role. That was it, just like that. That was not my role though. I am not Conrad Birdie."

On what he would have done with his life if he did not end up being a professional investor:

"As a matter of fact, McDonald's. I tried to get a job at McDonald's. I couldn't get a job. They would not hire me. It was a problem to get a hairnet over the afro."

"I always said when I grew up I would be a social worker. In some respects, I really do like some of the philanthropy stuff. I like getting out there and helping people. That is probably what I will do after Appaloosa I think."

On his biggest regret:

"I wish I would have used Rogaine earlier."

"Probably the biggest mistake we made was in '98 when we lost money in Russia. We did not understand how fast the markets could get illiquid and how dangerous it was to have concentration in some positions. That was one of the reasons we ask about concentration it is easier to get in than anything. It's sometimes hard to get out. In Russia we moved real fast but not fast enough to not have a loss. We thought that Russia was going to devalue and not default in '98 and I was wrong. That was a huge mistake. We were down some 20% in '98."

On how Appaloosa got its name:

"When we started Appaloosa we were going to name it Pegasus because everyone was using Greek names. We filed the name. We paid $300 and they said you cannot use it because it is taken. Pegasus Funds. Then we said Pegasus is kind of a horse. We did not want to be the Unicorn Fund. So we pulled out a horse book. We still have the horse book and the second name in the horse book was Appaloosa and we chose Appaloosa. The reason we did the A's--when we started things are sent out by fax. There wasn't email. If you were in the A's you had a half hour advantage compared to others at the end of the alphabet and you could trade if you were a small fund. So that's what we did."

Full video:

bloomberg.com

Copyright © 2013 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Bloomberg Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in