Star hedge fund manager Doug Kass, president of Seabreeze Capital Management, has been bearish on stocks for quite some time.
And even though the S&P 500 index and Dow Jones Industrial Average hit record highs Tuesday and many analysts are forecasting more gains ahead, Kass is sticking to his guns.
"I’m waiting. I’m net short, but only small. . . . I am waiting to pull the trigger," he told Yahoo Finance. "I am trying to control risk. It’s very important for the short-seller, because reward versus risk is asymmetric. It’s very important to have discipline in your position."
Someone who shorts a stock is subject to infinite loss, as a stock can rise forever. But someone who buys a stock can only lose what he/she puts in, as a stock can't drop below zero.
Economic stagnation overseas will ultimately hurt U.S. stocks, Kass says. "Twenty-five percent of the world is basically flat-lining or in a recession. We might be the cleanest shirt in dirty laundry, but it’s going to get soiled."
While overseas economic weakness makes Kass negative on U.S. stocks, it's having the opposite effect on CNBC commentator Ron Insana.
"No longer is the U.S. simply the best house in a bad neighborhood, it's about the only house worth living in, at the moment," he writes on CNBC.com.
And what does this mean for investors?
"Interest rates stay lower for longer in the U.S., rising not at all in 2015," Insana says. "Given the seasonal, cyclical and fundamental positives for stocks, it also underscores the notion that investing in domestic equities will be a good plan for 2015."
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