Hedge funds are the most bullish they've been on stocks in six years.
Net long exposure hit 52 percent in the fourth quarter, the highest since the first quarter of 2007, according to a report by Goldman Sachs.
"My expectation is that the market will reach a new high by the end of the year, with the S&P 500 at 1575," said David Kostin, Chief U.S. Equity Strategist at Goldman Sachs who co-authored the report. "Picking up the net exposure is consistent with the idea of gaining exposure to a rising equity market."
"The strategy of following the (hedge fund) community has been a very successful one," he told CNBC's "Squawk on the Street." "These positions matter."