I’ve followed money manager and financial commentator Doug Kass for quite a while. He’s plenty smart, savvy, and often takes gutsy moves in advance of the herd (like when he shorted Berkshire Hathaway early last year).
Kass predicted the current decline long before most mainstream media did. He now says the stock market will bottom out this week.
Why? because the federal bailout will work and because sentiment is so overwhelmingly negative.
The investment pyramid consists of the three angles of fundamentals, sentiment and valuation. I made this market bottom call based on my expectation of an early 2010 stabilization in the economy (making the 27-month recession the second-longest in history) coupled with an extreme sentiment and valuation swing.
He shorted Berkshire Hathaway (BRK-A) when it was about $130,000 a share (that’s not a misprint) and people mocked him for doing so. He cashed out about $90,000 a share. That’s what I mean by gutsy. And he was right. So, while I think his bottom call may be early, discount it at your peril.
Besides, I certainly hope he’s right. And for being irrationally exuberant in the face of mounting doom and gloom, he gets the Polizeros Perkypants Award of the Day.
(“Perkypants” is what Sue christened me as after one of my unwarranted outbursts of optimism…)