Tepper, founder of $20 billion hedge-fund firm Appaloosa Management, said at the SALT Conference in Las Vegas: "I'm not saying go short, I'm just saying don't be too fricking long right now."
But Jacob "Jake" Walthour, vice-chair of global investment management firm Ramius, took issue with the advice.
"David Tepper is far more wealthier than I am, so I'm not one to really argue with him, but I don't agree," he said. "I think that for the most part you stay invested in this market."
On CNBC's "Fast Money," Walthour said that equities remained the best place to park cash.
"There's a lot of liquidity still flowing into the market," he said. "If you look at where equity markets are, yes, they're hitting all-time highs, but you still have a lot of support coming into the equity markets from people rotating out of what is probably the most risky asset class right now, U.S. Treasurys.
"I don't know where David plans to put this capital, but if you look at credit spreads, they're at all-time tights. So, I guess I would have to ask him, 'Where would you put 40 percent of the capital that you plan to bring out of your equity exposure?'"