Doug Kass: Vicious Correction Due

By Dan Weil

Doug Kass, president of money manager Seabreeze Partners, says that while the stock market won’t return to its March lows, a “vicious correction” is in store.

“It’s going to be bumpy and have a lot of potholes, so we’ll have to be cautious,” Kass told CNBC TV.

The long-short fund that he began Jan. 1 is now short for the first time.

“The good news is I believe that … the variant view that we’ve seen a generational low is intact,” he says.

The bad news: “I do think that stocks are ahead of fundamentals,” he says.

“I think the stock market recovery, I would call [it] the 'Miley Cyrus' recovery. It’s very popular now (however) there may be not so much talent underneath that’s reflected in prices. And perhaps it won’t be as enduring.”

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