Whitney Tilson: 'Pullback of Some Sort Is Likely'

Tilson is saying what I have been saying, namely that March saw an increased number of attractive buys, but most of these are now fully priced. As a result, he is selling equities – even building up his net short positions.

Unlike bear turned bull Richard Bernstein, Tilson says that after a huge 60%+ run up which saw a trebling or quintupling of some beaten up shares like Huntsman, you need to be cautious. Invest in high quality and low beta, he says – exactly the opposite of what Bernstein is now saying.

Despite some positive earnings reports from the likes of Toll Brothers (TOL), the sector he hates the most right now is home builders because of a 2-year inventory overhang.

Below Tilson talks to Bloomberg’s Carol Massar. The video runs just over 3 minutes.

Comments

[untrusting ...:]

Good points by Whitney. Thanks for posting it.

Nov 11 12:18 AM

[The Alchemist:]

The problem is we still have too much inventory. People are saying oh but we have to rebuild at some point, but hang on, has anyone considered the possibility that we simply consumed too much, and won't be needing as much from now on? It has changed, humanity can't get drunk on possessions forever, because we'll never get everything we want.

Nov 11 03:49 AM

[bluesky123:]

and meanwhile, Europe is seriously rich according to Newsweek. The American brand of capitalism no longer impresses anybody.

"This year, Europe surpassed the United States in wealth, according to the Boston Consulting Group. Next year, Europe's population is expected to hit half a billion and its GDP to nearly match that of the U.S. and China combined"

www.newsweek.com/id/22...

Nov 11 10:29 AM

[Michael Clark:]

Europe has plenty of troubles of its own. Not the least of which is a brewing political cauldron of growing nationalism and the 'problem' of Muslim immigrants who do not want to become Europeans but want Europe to become Muslim. How does this dilemma play out? If the right wing of Europe becomes more powerful, this dilemma might play out in mass deportations of Muslims back to parent companies, a scenario which would be rife with political incorrectness. The Europeans, with the low birth-rates have a choice: 1) turn Europe over to Islam; 2) resist and deport Muslim immigrants. Both are distasteful results clearly.


On Nov 11 10:29 AM bluesky123 wrote:

> and meanwhile, Europe is seriously rich according to Newsweek. The
> American brand of capitalism no longer impresses anybody.
>
> "This year, Europe surpassed the United States in wealth, according
> to the Boston Consulting Group. Next year, Europe's population is
> expected to hit half a billion and its GDP to nearly match that of
> the U.S. and China combined"
>
> www.newsweek.com/id/22...

Nov 11 11:36 AM

[smfranke:]

I'm a "do unto others" kind of guy so I think the Europeans should treat the muslims as they treat people of other religions in the majority muslim countries. It may seem petty but that is the way the muslims are indicating that they should be treated.

Back on topic:
I like what Mr. Tilson has to say but I'm not entirely convinced we'll get a correction until enough of the big players start to worry about being last at the party when (if?) the excess liquidity gets withdrawn.

Nov 11 08:59 PM