Doug Kass Buying These Stocks Now (Not Apple)

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Douglass Kass

From the iPod to the iPhone and iPad, Apple released one "market-defining" product after another for years, but the technology company has grown so large that it's losing its "first-mover advantage" and its competitors are catching up, Seabreeze Partners founder Doug Kass told CNBC on Tuesday.

The popularity of Amazon's Kindle and Google's Nexus 7 in the lower end of the tablet market seemingly drove Apple to finally release a pocket-sized slate of its own. Apple introduced a smaller version of its iPad called iPad Mini Tuesday. In turn, Apple shares dropped near session lows after the company announced the 16 GB version of the mini will be priced at $329, higher than expectations.

(Read More: Apple Unwraps iPad Mini and New, Full-Sized iPad 4.)

"Apple is selling an equal product to the competition for more money, both in phones and tablets, and this strategy is not going to work forever," Kass said on CNBC's "Futures Now." "That's the biggest issue facing Apple."

In Kass' opinion, Apple's stock has become very vulnerable. He thinks it's "no longer an investment," but merely a trade. In fact, he doesn't particularly like investing in the overall market right now.

"Stocks have corrected pretty significantly and I've started to take in my shorts in a very gingerly manner," Kass said. "I don't think it's time to be an investor. I think it's time to be an opportunistic trader because I have never seen so much uncertainty and the only thing I'm certain about is the amount of uncertainty."

However, Kass said he's recently started buying shares of "new tech" companies, which provide entry points at relatively high valuations. Kass said he's bought shares of Sourcefire and Fusion-io over the past few days, for example. He also likes select large cap names right now, such as Bristol-Myers Squibb, Procter & Gamble and Yahoo.

"I've got an attractive valuation and everything I look at is risk-reward," Kass said.

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—CNBC.com and wires contributed to this report