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Are Improving Fundamentals Driving Bullish Bets?

Long-term gains in the stock market should come from a belief that market fundamentals are improving, right?

Isn’t that how you should interpret recent action?

Not necessarily.

A growing number of market mavens believe the fear not to own stocks is what’s driving buying – not a fundamental belief that things area getting better.

Brian Kelly of Kanundrum Research pegged the trend perfectly on Fast Money's Halftime Report. He said, “I think the stock market action right now is all about career risk,. Money managers can’t afford to have two bad years in a row.”

In other words, money managers have to hold long positions in stocks so they don’t miss the next leg higher. But they have to also have to get out quickly, as to minimize losses in the event of a downturn.

Gary Kaminsky, former managing director at Neuberger Berman feels much the same. And he thinks you can profit from their panic.

“There’s a fear of having cash and a fear of underperforming,” he explains. “When the markets are up and as a money manager you’ve held cash and you didn’t participate the most important thing to you is -- getting in.”

As a result Kaminsky thinks the dash for trash will continue. “I think names that did not participate March through August will have relative outperformance.”

What’s the trade?

Kaminsky suggests looking at apartment REITs and hotel REITs. Ahead of the broadcast he told our producers Avalonbay and Equity Residential are two names to get on your radar.

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Trader disclosure: On October 7, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), BTU); Terranova Owns (NOV), (MOS), (JPM); Terranova Is Short (CCL); Terranova Is Short (WYNN); Terranova Is Short (GRMN); Terranova Owns Dec. Gold Futures; Terranova Owns March Sugar Futures; Terranova Owns Crude Futures; Seymour Owns (ACI), (AA), (STD), (BX), (BAC), (SBUX); Seymour Owns (RTP); Najarian Owns (C) Calls; Najarian Owns (BRCD) Call Spread; Najarian Owns (DFS) Calls; Najarian Owns (DELL) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (JPM) & Short (JPM) Calls; Najarian Owns (HMY) Calls Spread; Najarian Owns (LAZ) & Short (LAZ) Calls & Long (LAZ) Put Spread; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (MYL) Calls; Najarian Owns (PLCM) Call Spread; Najarian Owns (TEVA); Najarian Owns (ORCL) & Short (ORCL) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (WFC) Puts; Najarian Owns (YHOO) Call Spread; Najarian Owns (DFS) Calls

For Deborah Weinswig:
Citigroup Global Markets Inc. acted as a joint bookrunner on the announced debt offering of (WMT)
Citi Owns (TGT)
Citi Owns (SKS)
Citi Co-Managed An Offering Of Securities of (WMT)
Citi Has Received Compensation From (M)
Citi Has Received Compensation From (TGT)
Citi Has Received Compensation From (WMT)
Citi Has Received Compensation From SKS)
Citi Expects To Receive Compesation From (WMT)
Citi Has Received Compensation From (COST)
Citi Has Received Compesation from (HD)

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