| NEW YORK, March 22
NEW YORK, March 22 Hedge fund manager Doug Kass
on Monday said his bearish calls in recent months that the
benchmark Standard & Poor's 500 Index .SPX would decline in
the double-digits are proving to be wrong.
Kass, the widely followed founder and president of
Seabreeze Partners Management, told clients in a note: "I have
been wrong -- at least, Mr. Market has been saying so!"
In September, Kass told Reuters he was betting the S&P
would end 2009 at about 920 and was shorting U.S. equities
because "we are facing a period of disappointing economic and
But the S&P index overall rose 23.5 percent last year on
signs the economic recovery in the U.S. was strengthening.
Currently, it trades at more than 1,162, while a recent
Reuters poll found investors and strategists forecast a 10
percent increase from where the index ended in 2009 at
Optimism about a rebound in the U.S. labor market and
profits are seen to drive stocks to their second straight
annual advance. Falling unemployment also could boost consumer
confidence and spur a revival in spending, a key driver of
In fact, Fed officials said at their recent policy meeting
that the overall economy is improving. In their statement, they
said: "Information received since the Federal Open Market
Committee met in January suggests that economic activity has
continued to strengthen and that the labor market is
"I am fully aware that my mistakes over the past few months
have been numerous and far-reaching," Kass said. "Above all, I
have been steadfastly skeptical regarding the sustainability of
the domestic economic recovery and in the view that the
foundation for a sustained move in the U.S. stock market was on
shakier ground than the consensus believed."
In a short sale, investors borrow shares in order to sell
them, betting that the stock price will fall. The goal is to
buy the shares back at a lower price and realize a profit on
the spread between the original sale price and the cost of
buying the shares back.
(Editing by Chizu Nomiyama)