On Friday, after Appaloosa released its latest 13F, we wondered if David Tepper had caught the "bearish billionaire bug" when, as his latest holding filing showed, he not only eliminated his massive SPY and QQQ call positions, but reduced the overall size of his long equity book by a third to $3.8 billion.
Today, CNBC's Kate Kelly caught up with Tepper's close circle, and reported that the Appaloosa billionaire "is now "on guard" in his approach to trading." She quotes a source who sais that "Tepper is neither too long nor too short", and who adds that "the fund manager thinks the biggest risk to trading stocks in the U.S. right now is attempting to "out-think the market."
Considering the "market" is merely what a group of confused central bankers decide it is, that may prove either too easy, or too difficult
Still, while he is far from his "pedal to the metal" euphoric days, Tepper advised against outright shorting: "If investors don't like what they're seeing as the S&P 500 and other indexes hit repeated all-time highs, they should put some money in cash rather than going too short, the source added."
This appears to be what Tepper has done, who in Q2 cashed out in full or in part from numerous positions.
So what does Tepper think of the market here? According to Kelly, Tepper thinks that "valuations, while on the high side, aren't overly rich in many tech and blue-chip stocks, added the person, and that central bank stimulus, which has distorted bond markets around the world already, may be starting to affect stock markets as well."
However, the message from Tepper who in May of 2014 when the S&P was at 1,890 famously jarred markets by warning "don't be too frickin' long," could be summed up as "don't be too frickin' short either," this person says.
Tepper's flagship fund is up slightly so far this year, CNBC adds. One thing we are certain of: if Tepper was chasing performance - like most other managers in the TINA boat - he would be buying up everything, and with leverage. The fact that he isn't, tells us what at least one more billionaire thinks of where the market goes next.