Hedge fund manager Doug Kass, president of Seabreeze Partners Management, sees stocks hitting the skids in 2014, estimating fair value for the Standard & Poor's 500 Index at 1,645.

That level is 10 percent below Thursday's close of 1,830.

"It remains my view that the S&P 500 will be down between 5 percent and 15 percent in 2014," Kass writes in a report obtained by CNBC. "[Price-earnings] ratios could contract this year — in marked contrast to the expectations of most Wall Street strategists."

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Investors are overly optimistic about corporate profits and economic growth, he explains. In addition, the market doesn't have the strength to carry on last year's 29.6 percent surge by the S&P 500, he says.

"In essence, the unexpected rise in stock prices in 2013 borrowed from 2014," Kass notes.

He says he actually had turned bullish briefly. "Early last week, with the S&P 500 at approximately 1,750, I suggested that the reward versus risk in stocks had turned more positive for the first time in many months," Kass writes.

But the market's rebound since then has made him bearish again.

Plenty of investors disagree with Kass' negative view. "People want to buy the dips now because the market made a bottom after Feb. 3," Donald Selkin, chief market strategist at National Securities Corp., tells Bloomberg.

"We got very oversold, and now it's believed that the trend is turning back up. People feel like we've seen a near-term bottom in the market."

Editor’s Note: Secret ‘250% Calendar’ Exposed — Free Video

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