Courtesy of Pragcap
David Tepper says you can’t go wrong buying equities here. The market certainly appears to be in full agreement as stocks have rallied in 12 of the last 18 sessions for a total of 10.4%. This is becoming reminiscent of the April rally when the macro risks appeared abundant and yet equity investors ignored the risks and continued to pile into stocks recklessly. As I was building my first sizable short position in over a year I often referred to this as the “can’t lose market” earlier this year. Of course, we all know how that ended – a 20% decline and a flash crash later and every one of the April stock market bulls was discussing the probability of a double dip. Then, just when everyone appeared most fearful, stocks flipped on the bull switch in early September. That bearish sentiment has cleared and now everyone is bullish and sees no risks on the horizon. Futures this evening are ready to stage another nice bull move. Is the “can’t lose market” back? More importantly, how long does this irrational move last before the herd is once again caught on the wrong side of the trade?