Charles Payne

David Tepper's comments about not being long or short actually reflect the mood of most individual investors for the past few years, except he was more than 100% invested in the market. Apparently, he is down to 60% as several issues bother him, including:

Topic

Issue

My Thoughts

ECB

Tight Policy

Tepper wants the spigots to flow with more money printing, but more than likely Europe and Germany would like rates to stay where they are.

China

Needs Stimulus

As much as China is chided for its phony numbers and manufactured economy, they seem to want more and more. China wants to cool its housing sector, but not to derail economic momentum. A tough task indeed, there will have to be selected stimulus.

Tepper complained about "coordinated compliancy" among central banks. He wants them to turn those machines back on and print. In fact, he threw down the gauntlet to the ECB, demanding that they lower rates next month. I think his concerns about deflation have some validity. However, I am no fan of money printing. In the end, it is a dangerous gambit, and is never undone without a degree of pain, which makes one wish, that the initial pain had been allowed to play out in the first place.

In addition, Tepper is worried about US economic growth, but needs to realize that any deviation from tapering would be a disaster, but he has a point; again, there are many assumptions about a stronger second half in 2014. We have also modeled for a stronger second half. Tepper has been right for a long time (in terms of being worried about economic growth), but individual investors should understand that this guy does not invest like Main Street. Keep in mind; Tepper adjusted his position six months ago, and when he gets 100% invested again, you will not know it until after the fact.

Some of his observations were fair, and I have been asking for higher cash positions throughout the past year, although I understand that there are limits, and that it has been important to put money to work on dips. You have to be vigilant in the market and know what is moving the market. I was very impressed with news from the New York Fed and Philadelphia Fed (strong pricing power: see chart), and felt that the initial jobless claims cracking under 300,000 is a big deal.


Charles Payne

Charles V. Payne is a regular contributor to the Fox Business and Fox News Networks. He is also the Chief Executive Officer and Principle Analyst of Wall Street Strategies, Inc. (WSSI), founded in 1991 which provides subscription analytical services to both individual and institutional investors.