David Tepper, founder of the Appaloosa Management, is far less bullish on the US equity markets than he was a few years ago. Tepper believes now could be a time to be raising cash as the market faces uncertainty and potential headwinds. Among Tepper’s concerns are the market’s current valuation, earnings growth, and the possibility for declining profit margins. While Tepper does believe that stocks will still produce positive returns over the next 4-5 years, he thinks that in the short run the market should correct, although he admits he does not know at what level the market will find equilibrium.
According to the book, “The Alpha Masters”, Tepper’s now $20 billion fund has had only three down years (1998, 2002, and 2008).