- David Tepper sees limited value in stocks and bonds in the current market.
- The Appaloosa Management boss is concerned about inflation, interest rates, and stimulus.
- Tepper views crypto as a store of value like gold, but suggested it may be in a bubble.
David Tepper questioned the appeal of stocks and bonds, compared cryptocurrencies to gold, and laid out his economic concerns in a recent CNBC interview.
The billionaire investor and Appaloosa Management chief also warned against buying high-yield bonds, advised investors to hold stocks for the long term, and hinted the ongoing crypto boom may be a bubble.
Here are Tepper’s 8 best quotes from the interview, lightly edited and condensed for clarity:
1. “I don’t think there are any great asset classes right now. I don’t love stocks, I don’t love bonds, I don’t love junk bonds. Nothing looks that great.”
2. “You stay invested in the stock market to a certain extent. You don’t have your highest concentration that you’d ever have, but you continue some investment. I don’t think we’re in the sort of market where you have to worry and say, ‘I’m gonna get out no matter what, and I wanna go short the market.'” – Tepper’s advice to investors.
3. “If you do have higher interest rates, you can’t love the stock market as a trade necessarily. On the other hand, if bonds stay in the 1.6% range, the stock market will probably go up in the short term. It seems so stupid to invest in bonds at 1.6%.” – referring to the 10-year US Treasury note.
4. “You have to pay taxes on gains. So if I like stocks for the long term, I don’t necessarily want to sell them. That doesn’t mean I haven’t taken down my exposure. It doesn’t mean I don’t have Nasdaq futures that I’m short in some way. My exposure’s not high right now, but I still am exposed to stocks. People should be exposed to stocks for the long run.”
5. “I don’t love the market in the intermediate term. I’m in Vegas, and I don’t really love Vegas.” – Tepper flagged the uncertainty around inflation, interest rates, stimulus, the job market, and supply chain issues.
6. “It can stay there for a couple years, and you can get excess returns. But if you look at the chart, at some point you’re gonna get your derrière handed to you. You can pick up nickels in front of that steamroller for the next year or two. – commenting on the outlook for high-yield bonds.
7. “Crypto is gold to me, it’s a store of value to me. I do have a relatively small amount. I’m not really an investor in crypto, I wish I was this year. The chart looks a bit like a tulip to me, but maybe I’m looking at it wrong.” – referring to the famous tulip bubble in the Netherlands in the 1630s.
8. “It’s just a question of what should be the price. The cost of mining it is a lot lower than the current price. If the Fed delays raising rates, sure it can go up.” – discussing bitcoin’s price.