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Friday, September 24, 2010

The Billionaire David Tepper's Interview

The Hedge fund managerand The Billionaire David Tepper, who got the highest paid manager in 2009 thanks to his bet on banking stocks at their lows in 2009, is stretching up on stocks.

Two things are going to happen. Either the economy is going to do well- and what assets will do good? Stocks. Bonds won't do so good, gold won't do so good. Or, the economy is not going to pick up and the Fed is going to come in with QE. Then what's going to do well? asks Tepper, pausing for effect Everything. Stocks bonds in the near term gold. Tepper argued that with the Fed indicating that it really wanted inflation, there was no way he could not be more long on equities. Tepper's $12  billion fund Appaloosa Management was more exposed to bonds, but has been trading more money to equities. He did say that until the Fed acts, stocks could face such downside and that he had puts in place to limit his losses.
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Tepper purchased bank stocks at their lows in early 2009, when most of the market was plagued with fear that banks would be nationalized. The fund manager said purchasing financial stocks was an easy call, after the Government put out a paper that said they were going to buy securities and the prices at which they purchased them. Nobody believed them, but Tepper did. Sometimes it is just that easy, he said CNBC.


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