Doug Kass Continues To Think The March Low Was The Market Bottom


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March 24, 2009 9:27 AM EDT Send to a Friend
Doug Kass who famously called the nadir in March, continues to think his prediction is correct. Seabreeze Partners' Doug Kass wrote a short piece for Real Money describing why he thinks we may have reached a generational market bottom in March.

Doug's comments are below.
  • I continue to believe that the early March low represented a yearly and, quite possibly, a generational market bottom.
  • The mustard seeds for the economy and the U.S. stock market have begun to take root.
  • The rate of change in 10 of 12 factors in my watch list are improving.
Last month, Kass came up with a watch list of conditions, that if improved, would likely indicate a sustainable rally for equities.

Below are a few of the conditions where Kass gives a grade on each condition from February and he updates them today.
  • Bank balance sheets must be recapitalized. (Grades the package a B+, up from a D+ only two weeks ago.)
  • Financial stocks' performance must improve. (Grade B+, up from a D.)
  • Credit spreads and credit availability must improve. (Grade D, flat from two weeks ago.)
  • We need evidence of more favorable reactions to disappointing earnings and weak guidance. Kass was encouraged by the reaction to the poor results from companies like FedEx (NYSE: FDX), General Electric (NYSE: GE) and Freeport-McMoRan (NYSE: FCX). (Grade B+, up from a C+.)
  • Credit spreads and credit availability must improve. (Grade D, flat from two weeks ago.)

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