Posts tagged ‘Doug Kass’

Kass: Triple Lindy Redux

About a year ago, I wrote about Doug Kass (founder and president of Seabreeze Partners) and his attempt at pulling off the famous “Triple Lindy” dive,  which was made famous in the classic movie Back to School starring Rodney Dangerfield. If I were a judge, I would say Kass’s landing wasn’t a perfect 10, but rather closer to a 6.5. After successfully nailing the bear market in 2008, and subsequently declaring the “generational low” of March 2009, Kass became cautious in June 2009. At the time, Kass pulled in his horns by pronouncing a consumer-led double dip in late 2009 or in the first half 2010 from a consumption binge hangover, while declaring his previous 1050 S&P 500 index target as overly ambitious. What actually transpired is the S&P 500 went from around 942 to 1220 over the next ten months, or up about +30%.

Today, Kass is trying to make another large splash, but now he is reversing course and once more calling for a rally…at least a mini one. Rather than speaking in terms of his previous generational low (S&P 666), Kass sees the recent lows around 1,010 being the “bottom for the year” and his new 2010 target is based on climbing to positive territory for the year, implying a +10% to +12% move from the beginning of July.

View Doug Kass Interview and Prediction

Kass is not your traditional investor, and he admits as much:

“I’m not a perma-bear, I’m not a perma-bull. I try to be flexible and eclectic in my view, and this is especially necessary in a market, which is so volatile as it’s been for the last several years.”

 

In explaining his upbeat rationale, Kass highlights nuanced aspects to employment data, payroll growth, moderate economic expansion, and an attractive valuation for the overall market:

“I’m not technically based, therefore I’m not sentiment based, I’m fundamental based….The markets are traveling on a path of fear and share prices have significantly disconnected from fundamentals.”

 

Even if Kass didn’t nail the “Triple Lindy,” he still deserves special attention as a practitioner, in addition to his side job as a market prognosticator. Additional recognition is warranted solely based on the potshots he aimed at rent-a-strategists like Nouriel Roubini, CNBC celebrity, (see Roubini articles #1 or #2) and Robert Prechter, long-running technician who is currently predicting Dow destruction to unfathomable level of 1,000. I’m not in the business of predicting short-term market gyrations, but I’ll enjoy watching Kass’s next dive to see whether he’ll make a splash or not.

Wade W. Slome, CFA, CFP®  

Plan. Invest. Prosper.  

www.Sidoxia.com 

*DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients own certain exchange traded funds, but at the time of publishing SCM had no direct positions in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC “Contact” page.

July 11, 2010 at 8:07 pm Leave a comment

Kass Attempts the “Triple Lindy”

backtoschoolAlthough Doug Kass, founder and president of Seabreeze Partners, has historically been primarily a dedicated short-seller, he presciently called the market low in March 2009 (what he now calls a “generational low”). Like in the movie Back to School starring Rodney Dangerfield, Doug Kass is trying to successfully execute the impossible “Triple Lindy” dive of his own.  Thus far, Kass has completed the first two legs of the dive by accurately being bearish in late 2007 and subsequently bullish at the recent market bottom in March 2009. Now he sees, “potholes on the road to higher prices,” and he thinks we will be stuck in neutral for quite a while.

Kass YahooClick Here for Kass’ Yahoo! Video Interview

Like other prognosticators, I feel like Mr. Kass is trying to have a little of his cake and eat it too, since he previously called a run to 1,050 (S&P was at 942 on 6/4/09) and now he has adjusted his posture to a neutral stance. Therefore if prices move upwards, his previous 1,050 call is firmly in place, and on the other hand if we move sideways or downwards, then his neutral prediction is still in play.

The "Triple Lindy" Dive

The "Triple Lindy" Dive

As one of the American judges, I give Kass a score of 9.0 regardless of whether his squishy call for a potential double-dip (consumer led recession) comes to fruition in late 2009, or early 2010. Congratulations Doug on completion of the first two sequences of the Triple Lindy!

June 22, 2009 at 5:30 am 9 comments


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