Doug Kass says stocks have topped for the year, and a “double dip” is likely into 2010.
As many of you recall, Doug Kass made a deadly accurate forecast for a market rally during the March ’09 “Nouriel Roubini Bottom”. Doug Kass was also quite accurate in predicting the summer rally, and the market has now reached his target, so he is selling stocks.
Kass believes that all the good news has now been baked into stocks, and they are priced for perfection. In fact, Kass is going short the indexes.
WSR opinion: Too many investors are calling for a September/October crash. This is the same group that was confounded when “sell in may and go away” failed to work this year. Odds are that they will be wrong again, because the stock market follows the path of maximum frustration. We don’t think there will be a serious crash until all the suckers are in. So there is likely 10-20% upside still remaining.
The time to sell will be when Time, Money magazine, or New York Times starts running stories about “Is it time to get back in the market?” and various propaganda crediting Obama with the “recovery” and saviour of the proletariat retirement savings of America.
Sell hubris – buy fear.