Tags: Tepper | stocks | value | ride

David Tepper: 'Enjoy the Ride' of Rising Stocks

By    |   Tuesday, 30 December 2014 09:02 AM

The S&P 500 index rose to yet another record high Monday and is now "fairly valued," says hedge fund star David Tepper, founder of Appaloosa Management.

But it still has room for further gains next year — to the tune of 8 to 10 percent, he told CNBC. A 10 percent rise from 2,090 Tuesday's closing price would put the index at 2,288.

"I think we'll have a good year," he told CNBC. Global central bank easing will help, he said. "You have people responding to deflation all over the place. First thing that goes up when people try to fight deflation is asset prices," Tepper noted.

So what should investors do?

"It's not the time to be careful now. Enjoy the ride," he said. To be sure, "don't get too comfortable when the ride starts. [But] the ride hasn't started yet."

Last week, Tepper compared 2015 to 1999, a year when stocks boomed, before beginning a crash in 2000. "At some point in 1999, you had to wake up" to overvaluation, he told CNBC.

Marc Faber, publisher of the Gloom, Boom & Doom Report, isn't so enthusiastic about stocks. "I still think sentiment about stocks in the U.S. is much too bullish," he told Bloomberg TV.

Faber prefers bonds.

"What would you rather own, given that forecasts are so optimistic about the dollar, U.S. 10-year Treasurys yielding 2.2 percent, 10-year French bonds yielding 0.88 percent, 10-year German bonds at 0.56 percent or 10-year Swiss bonds at 0.22 percent?" he asked.

In light of the global economic slowdown and low bond yields in the Japan and Europe, "I think Treasurys aren't such a bad alternative," Faber said.
 

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The S&P 500 index rose to yet another record high Monday and is now "fairly valued," says hedge fund star David Tepper, founder of Appaloosa Management.
Tepper, stocks, value, ride
278
2014-02-30
Tuesday, 30 December 2014 09:02 AM
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