Wall Street is filled with articulate incompetents. Those who are wonderful on television or in front of a crowded audience of return hungry investors, but when it comes to actual performance they are no better than an 85 year old man that is on his honeymoon without the Viagra. They fall flat consistently. That is the only type of consistency they know, actually. The consistent mediocrity of the Wall Street crowd, from the hedge fund managers on down to the junior analysts who are led astray from day one will never change. It sells. People enjoy buying image more than they do truth. Until that fundamental human fact changes, Wall Street will remain the same.
That is why when a guy as unpolished yet successful as David Tepper comes along, you have to love him. This is one of the most successful investors of the past 20 years. His returns are consistently tremendous. His intestinal fortitude to make large bets going against popular consensus is legendary. He has vision. And vision is something sorely lacking among investors of all variety.
His vision tells him that stocks are not in a bubble currently. In fact, during an interview today, he stated that stocks have 20 to 30 percent upside into 2014. This is not an opinion you will see shared often. It falls too far outside of the distribution curve for normal returns when compared to the past 15 years. In other words, it takes balls and vision to make such a call. His primary worry was that "he wasn't long enough," a refreshing perspective that I can guarantee you haven't heard from another manager in 2013.
He is going to be right. Equities are closer to a beginning than an end to this bull run as I have been conveying all year. While Tepper expects a sharp 5-10 percent drop in Q1 of 2014 brought on by Fed tapering, I expect it will take place in Q2. It will be sharp, but short. It will have all the bearistas out working overtime discussing the various reasons stocks will drop further.
Be careful the voices you allow to populate the empty spaces of your mind. They will creep into your methodology at the worst possible times, causing underperformance that is difficult to overcome. If you are going to allow one voice to make its way into your cerebral cortex, David Tepper is as good as it gets.
