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Dougie Kass

@DougKass

10 Jan

@TSTRMPro

@TSTRMPro Jan 10, 2022 | 12:50 PM EST DOUG KASS
Some of My Stronger Convictions
"The best lack all conviction, while the worst are full of passionate intensity."
- William Butler Yates
I recently wrote an honest column about my lack of conviction and my general confusion in

viewing a market at all-time highs, with so many adverse outcomes possible/likely.
However, I do have several strong conviction views:
* Markets rise and fall, but, on a risk/reward basis, the S&P Index is unattractive given the current level of valuations, elevated by

historical standards, and the many possible economic and profit headwinds.

* The Bull Market is old and many/most stocks (save "The Nifty Five") are technically broken.
* The odds now favor that Mr. Market is making a broad, distributive and important top.
* Significant supply

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Dougie Kass

@DougKass

15 Oct 21

@TSTRMPro

@TSTRMPro Oct 14, 2021 | 03:10 PM EDT DOUG KASS
Uh, Oh, FIFO!
Here is one of the important reasons I do not own any retail stocks (and I am short a bunch of 'em!).
Almost every retailer has abandoned LIFO -- last in, first out -- accounting.
So, there is no shield to inflation

for retailers now.
Retailers will now have to pay taxes on inventory profits, which are mythical. For example, goods bought for $4, now cost $5 per unit to replenish -- and $1 more working capital is now needed.
This must be financed in the short-term credit market.

This was not pretty, as was learned by food analysts in 1973-1974.
I have never forgotten that period.
Eventually, as prices rise beyond incomes (as they are now doing) consumers will buy fewer units.
Inventories pile up and you get a recession ... and likely a bear market.

Read 4 tweets

Dougie Kass

@DougKass

12 Oct 21

@TSTRMPro

@TSTRMPro
Oct 12, 2021 | 08:30 AM EDT DOUG KASS
Why I Shorted Disney Last Week
* The ever popular and heavily institutionally owned $DIS is seen by many as the perfect reopening trade
* We are less certain
* Following strong 3Q results (in August), most analysts raised their

EPS forecasts and price targets - that may have been premature
* Since then, Disney reported weakness in Disney + (analysts rationalized the disappointment)
* Going forward, the company faces unusual execution challenges in streaming, legacy television, movies , cruises and in

theme parks - in an unsteady and uncertain macroeconomic backdrop
* Consequently, sell side consensus expectations - for Disney's EPS to rise from $2.10 this year to over $6/share in 2023 - may be too ambitious
* Disney's high valuation incorporates successful execution in a

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Dougie Kass

@DougKass

12 Oct 21

Next up bank earnings, don't get sucked into trading them on the long side:

Oct 11, 2021 | 01:10 PM EDT DOUG KASS
Why I Would Be Cautious on Banks Going Into Reporting Season
Bank stocks are among the most favored value plays of many money managers and strategists based on the

fact that the industry is a direct beneficiary of higher interest rates.
This is indeed true - as banks are balance sheet and income statement sensitive to a steepening yield curve and higher interest rates.
But for banks to profit after a great run since March, 2020, rising

rates I believe have to be accompanied by an improving economy - not just higher inflation.
And, unfortunately, as expressed in yesterday's opener, that is not the case:
* Citigroup's Global Economic Surprise Index has turned negative and has fallen to levels historically

Read 6 tweets

Dougie Kass

@DougKass

11 Oct 21

Oct 11, 2021 | 01:10 PM EDT DOUG KASS
Why I Would Be Cautious on Banks Going Into Reporting Season
Bank stocks are among the most favored value plays of many money managers and strategists based on the fact that the industry is a direct beneficiary of higher interest rates.

This is indeed true - as banks are balance sheet and income statement sensitive to a steepening yield curve and higher interest rates
But for banks to profit after a great run since March, 2020, rising rates I believe - and it is the case historically - have to be accompanied

@tomkeene

by an improving economy.
And, unfortunately, as expressed in our opener, that is not the case:
"Citigroup's Global Economic Surprise Index has turned negative and has fallen to levels historically associated with an economic slowdown/recession" @tomkeene @jimcramer

Read 4 tweets

Dougie Kass

@DougKass

6 Oct 21

@cnbcfastmoney

@cnbcfastmoney @MelissaLeeCNBC @TSTRMPro
Oct 06, 2021 | 01:40 PM EDT DOUG KASS
Why I'm Not Buying General Motors
*When it seems everyone else is!
General Motors ($GM) has declared that its move into electric vehicles will serve to double revenues by 2030.

On the face of it that's a very powerful statement. Moreover, I appreciate the EV transformation and the relative inexpensive valuation - but unlike many who have embraced ownership of $GM I am not anxious to buy the stock.

Here is my explanation and, hopefully, "second level thinking", for why I am avoiding the shares - and that of Ford ($F) , with apologies to Gary "US Bonds":
* The transformation into EV vehicles is simply replacing a legacy business with a new one -

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