The latest on what the billionaire investor is thinking comes to us from Institutional Investor, which has a thorough take on what he’s thinking and where his money is right now.
He’s up 10% in his Appaloosa fund and 8% in his Thoroughbred fund, according to ii.
Here’s why he’s removed leverage:
Tepper has reduced his risk somewhat in response to recent global political developments. He has taken down his P/E estimate from 15 to 14 1/2 times and at the beginning of March removed all leverage.
Removing his leverage might be a result of Tepper’s concern over the Middle East.
He is most concerned about developments in the Middle East. Tepper is said to be especially concerned about Saudi Arabia. Sources say if the oil fields in Saudi Arabia are burning, Tepper would react to that by selling and going heavily into cash. In general, he is said to believe if the Middle East blows up, you can lose half your money.
Here are his thoughts on oil:
Rising oil prices so far are not concerning him. He believes the economy can handle $100 a barrel right now and $110 per barrel in six months, for example, say people familiar with the hedge fund firm.
And on inflation:
At this point, he is not worried yet about inflation, although he does believe the day of reckoning has moved closer, to one to two years out now.
He also believes that if inflation starts to increase, it will result in a flatter stock market. Another bet would be to short Treasuries, provided, again, the Middle East does not blow up.