- The threat coronavirus poses to global markets “certainly ruined the environment” for long-term investors, Appaloosa Management founder David Tepper told TheStreet on Saturday.
- The billionaire told CNBC just two weeks ago that he and his hedge fund “have been long and continue that way.”
- Tepper also warned against taking additional risks until the outbreak subsides, saying “if you’re a long-term person, you better not be leveraged.”
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David Tepper told CNBC on January 17 that he and his hedge fund “have been long and continue that way.” Two weeks later, the billionaire investor is warning of new risks in such positions.
US stocks have tumbled from their record highs as coronavirus fears grip investors, and uncertainty around the outbreak could keep markets from recovering in the near term, the founder of Appaloosa Management told TheStreet on Saturday.
“Certainly ruined the environment of the set up right now,” Tepper said. “You’ll have to be careful because it may be a game changer. So you just gotta be cautious.”
The outbreak is already responsible for more than 360 deaths as of February 3, and more than 17,400 people are infected. A man in the Philippines became the first to die of the virus outside of China on Saturday.
Economies around the world are also taking hits from the virus. China is reportedly eyeing a cut to its 2020 growth forecast as the outbreak’s rapid expansion through the country prompted factory closures, quarantines, and travel bans. JPMorgan analyst Haibin Zhu lowered his first-quarter China GDP estimate to 4.9% from 6.3% on Wednesday.
Chinese stocks tanked as much as 9.1% on Monday as trading opened for the first time since January 23. US futures generally ignored China’s sell-off, with all three major indexes up at least 1.1% following a Friday tumble.
Tepper noted that investors holding on to their long positions should avoid any additional exposure until virus-related risks cool.
“If you’re a long-term person, you better not be leveraged,” the billionaire said.
The fund manager announced in 2019 that he would return capital to investors and convert Appaloosa to a family office in the near future. The fund holds about $US14 billion in assets under management, according to CNBC.
Following the fund’s conversion, Tepper plans to focus on the Carolina Panthers, an NFL team he recently bought. He’s also backing the creation of a Major League Soccer team in Charlotte, North Carolina.
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