Doug Kass is Optimistic About Stocks and Sees 15 Surprises

By on January 6, 2012

Doug Kass - Founder, Seabreeze PartnersLarry Kudlow interviewed Doug KassSeabreeze Partners, a couple of days ago regarding his investment outlook for 2012.

Kass said high-frequency economic statistics were improving with rapidity and well above consensus expectations. He added that the political landscape is more market friendly given gains by the Republicans.

Kass also mentioned that sentiment is terrible with the risk premium back to 1974 levels.

Kass feels the stock market is statistically cheaper than the bottom of 2009.

The interview continued (see below) with Kass commenting on the European crisis, his view on interest rates, investor’s allocation shift to bonds, the valuation and attractiveness of American banks, and the housing market.

Phil Orlando, chief equity strategist at Federated Investors, was also on hand with Kudlow giving his opinion on the markets.  Orlando referred to stocks as being “ridiculously cheap.”

Kass was quite accurate with his market calls last year. He predicted a flat market which was right on the mark, and back in August he said the market hit the low for the year (link). This was a close call, although the market went marginally lower in early October.

About a week ago, in the tradition of Byron Wien, Kass released his 15 surprise predictions for 2012 (link). Kass sees the S&P 500 approaching its all-time high in 2012 as the economy accelerates. He specifically recommends buying Home Depot (HD), Lowes (LOW), Ford (F), and General Motors (GM). There are many more predictions and actionable ideas at the link.

Kass isn’t always correct, but he is definitely worth listening to given his track record.

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