David Tepper, the hedge-fund manager who runs the $15 billion Appaloosa Management LP, said he’s bullish on U.S. stocks as the economy is set to grow by as much as 3 percent this year.
“This country is on the verge of an explosion of greatness,” Tepper said today in an interview with Stephanie Ruhle on Bloomberg Television’s “Market Makers.” “The key is to be long equities this year.”
Tepper said investors should own stocks because they’re historically inexpensive, U.S. companies have little debt, interest rates are low, credit is fully valued and the major risks to the global economy, such as a debt crisis in Europe, have diminished. Short Hills, New Jersey-based Appaloosa, which celebrates its 20th anniversary this year, returned 30 percent in 2012, he said.
Tepper, 55, made his last big call on equities in 2009, when his fund returned 130 percent betting on bank stocks in the aftermath of the 2008 financial crisis. He owns Citigroup Inc. today, saying the New York-based bank may rise 50 percent because of its strong international business. Citigroup declined 0.1 percent to $41.60 at 1:09 p.m. in New York.
U.S. stocks will get a boost as investors shift from credit investments, which are headed toward “extreme value” after climbing for the past few years, Tepper said.
Pension funds and insurers are generally “underweight” in equities, he said, while individual investors are starting to buy stocks. In the week ended Jan. 9, U.S. stock mutual funds attracted $14.8 billion in net new money, the most since at least 2007, according to the Washington-based Investment Company Institute.