Kass: Market’s Reward to Risk Unattractive

“I would gauge the market’s reward to risk as unattractive. To this observer, the market has priced in a smooth and self-sustaining global recovery and has not priced in any number of adverse outcomes (which seem to have a rising probability of occurrence).

“While it is impossible to see the future with precision, in broad terms, I see upside to the S&P Index to about 2070-2100 and the downside to approximately 1830-1870 over the next six to twelve months (compared to the current cash level of 2020) — a negative ratio of $2.60 of risk vs. $1.00 reward (170 S&P points of downside/ 65 S&P points of upside). I don’t like those odds.

“My strategy is to play defense and err on the side of conservatism as the potential for a market correction looms.”

— Excerpt contributed by Jason Kelly


Z-val: Doug Kass
Via: Tumblr
Date: 1/20/15
Disposition: Long-Term Bearish
S&P 500 on 1/20/15: 2023
S&P 500 on 10/20/15: 2031
Change: +0.4%
Judgment: Wrong

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