Doug Kass: What He's Holding and His View on the Markets

Doug Kass

Doug Kass is currently long Ford (NYSE:F) and General Motors (NYSE:GM).  He talks up at why he's "Cautiously Opportunistic".

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( | Doug Kass) Since mid-2010, I have incorrectly maintained a cautious market outlook.

As mentioned in my "Mea Culpa," my concerns have been consistently dismissed in the marketplace as equities have marched higher.

In support of my cautious investment view, I had offered a series of arguments on why numerous secular headwinds would produce nontraditional challenges to the notion of a smooth and self-sustaining economic recovery that was the foundation of the bullish cabal's baseline case.

Among my chief concerns have been:

    * an increase in structural unemployment;

    * rapidly advancing food and other input prices which raised the specter of lower corporate profit margins and disappointing (and more volatile) corporate profit growth;

    * fiscal imbalances (and the austerity that ensues) at the local and state levels;

    * an apparent unwillingness of either political party to address the federal budget deficit;

    * a still-moribund housing market plagued by a large shadow inventory of unsold homes;

    * a eurozone that has only temporarily deferred its sovereign debt problems;

    * rising instability in the Middle East and the resulting sharp increase in energy prices;

    * slowing growth in China; and

    * unknown tail risks of the previous economic and credit cycle.

As well, I have been concerned about the screwflation of and pressures on the middle class and the ultimate adverse impact on economic growth and corporate profitability.

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