The head of Appaloosa Management is “rejecting arguments that stocks are overvalued and believes there are still plenty of opportunities,” according to a recent CNBC article.
Tepper says “any comparisons to past overheated markets are ridiculous,” adding that while stocks do look expensive, higher multiples are supported by the global economy in which he believes growth will continue and earnings will improve. Tepper argues further that stocks are still inexpensive relative to interest rates, and any rate hikes from the Fed will be slow in coming.
The article cites Tepper’s 2010 prediction that “either the market would rally on strong fundamentals or the central bank would inject more liquidity into the financial system to boost equities,” which was soon followed by a Fed announcement of additional quantitative easing. This, the article says, rejuvenated the post-crisis stock market and led to what became known as the “Tepper Rally.”