WHEN: Today, Thursday, September 10th
WHERE: CNBC's "Squawk Box"
This week, CNBC's "Squawk Box" kicks off its 20th anniversary celebration with a line-up of big names in investing and politics. Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Appaloosa Management Founder David Tepper on CNBC's "Squawk Box" today. Following are links to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000419283 and http://video.cnbc.com/gallery/?video=3000419287.
All references must be sourced to CNBC.
TEPPER ON BUYING
IF WE HAVE A 20% CORRECTION, OR A 15% CORRECTION, I WOULD BUY. I DON'T KNOW WITH BOTH HANDS, I'D HAVE TO SEE WHAT THE WORLD LOOKS LIKE BUT I'D BE BUYING.
TEPPER ON BRIC COMPANIES
YOU HAVE CHINA WITH A BIG GROWTH PROBLEM. BRAZIL DOWNGRADED, RUSSIA JUST A MESS, INDIA'S OKAY. SO, A FEW YEARS BACK, SOMEONE SAID THESE BRIC COMPANIES WERE GREAT. YOU WANTED TO LOOK AT US THESE COMPANIES WITH BRIC EXPOSURE. ITS GREAT TO BE STANDING ON TOP OF THAT BRICKAND HAVE A HIGHER PE, BUT WHEN THAT BRICK IS AROUND YOUR NECK AND THE WATER IS RISING THAT'S NOT SUCH A GREAT THING BECAUSE YOU CAN DROWN WITH THAT BRICK.
TEPPER ON GLOBAL RESERVE FLOWS
THE RESERVES ARE NOT JUST CHINA. ITS AROUND THE WORLD. CHINA WAS 4 TRILLION THE NUMBER IS 10. YOU HAVE RESERVES COMING OUT OF SAUDI ARABIA, OUT OF THE PETRO COMPANIES, RESERVES COMING OUT OF ALL LATIN AMERICAN, OUT OF REST OF ASIA. SO ITS JUST CUMULATIVE. CHINA IS THE BIG KAHUNY. IS THAT LIKE WHAT YOU ARE JOE THE BIG KAHUNY? KAHUNA.
TEPPER ON CHINA FLOWS
IF THE CURRENCY IS OVER VALUED. PEOPLE WILL FIND A WAY OUT OF THE CURRENCY. NOW THEY CAN SHOOT PEOPLE AND KEEP THEM FROM TAKING MONEY OUT. BUT WHAT THEY CAN'T DO IS THEY CAN'T KEEP THEM FROM PAYING BACK DOLLAR DEBT AND EURO DEBT AND HONG KONG DOLLAR DEBT, WHICH IS THE SAME AS DOLLAR DEBT. SO THAT MONEY WILL LEAK OUT. BUT YOU CAN -- IT WILL LEAK OUT REGARDLESS OF WHAT THEY DO. BUT WHAT THEY CAN DO IS THEYRE TRYING TO KEEP -- THEY CAN TRY TO MAKE IT TOUGHER FOR OTHER PEOPLE TO TAKE OUT MONEY. WHEN YOU HAVE AN OVERVALUED CURRENCY LIKE YOU HAD AN UNDERVALUED CURRENCY, THERES A -- THEN WHEN YOU PUT -- MARKETS WORK. THE RIVERS FLOW. IF YOU TRY TO KEEP THE RIVER FROM FLOWING, AND IT KEEPS FLOWING, FLOWING YOU BETTER HAVE A VERY GOOD DAM.
TEPPER ON DOING WELL IN THE STOCK MARKET
IF YOURE THE AVERAGE GUY, OVER TIME YOU WONT DO WELL IN THE STOCK MARKET. WERE NOT TALKING ABOUT, YOU KNOW, CRASHES HERE, MASSIVE MISVALUATIONS. WERE TALKING ABOUT A MARKE THAT SHOULD CORRECT. OKAY? AND THE QUESTION IS WHAT IS THAT LEVEL? LISTEN. IVE BEEN -- BEFORE WE HAD THIS RUN, WHEN I GREW UP IN THE BUSINESS IN THE 80s AND 90s AND YOU WERE THERE, WE HAD 10%, 15%, 20% CORRECTIONS ALL THE TIME. HEY, GUESS WHAT. ITS BACK TO THE FUTURE TIME.
TEPPER ON BEING NOT AS BULLISH
IM NOT PROBABLY AS BULLISH AS I COULD BE BECAUSE I HAVE PROBLEMS WITH EARNINGS GROWTH, PROBLEMS WITH MULTIPLES, PROBLEMS WITH ALL KINDS OF PROBLEMS. SO I CANT REALLY CALL MYSELF A BULL. HOWEVER, I WILL SAY THIS. IF YOU INVEST TODAY IN THE STOCK MARKET AND I THINK PEOPLE HAVE SAID IT IN FIVE YEARS EVEN IF YOU INVEST IN 1800, EARNINGS GROW A LITTLE BIT. THEY DON'T GROW 7% A YEAR BUT THEY GROW 5.5% A YEAR OR SOMETHING LIKE THAT, YOU WILL MAKE MONEY AND AT THE END OF THE FIVE YEARS .
TEPPER ON THE U.S.
DAVID TEPPER: WERE NOT HELD HOSTAGE. THE UNITED STATES IS NOT HELD HOSTAGE BY THE GLOBAL ECONOMY. THE U.S. STOCK MARKET, THE SPX, WHICH IS 50/50 U.S. AND THE REST OF THE WORLD, IS NOT THE U.S.
JOE KERNEN: IT MATTERS MORE NOW.
TEPPER: ITS 30% EMERGING MARKETS. OKAY. SO LISTEN. YOU CAN TRY TO NOT SEE WHAT IT IS AND PEOPLE CAN FOOL THEMSELVES THAT ITS A U.S. MARKET, THE STOCK MARKET IS THE U.S. THE U.S. IS FINE. WE'RE TALKING 5.1% UNEMPLOYMENT. IT DOESN'T MEAN THE STOCK MARKET IS THE SAME AS THE U.S.
TEPPER ON VOLATILITY
WE ARE NOT TALKING THE SYSTEMATIC RISK IN THE END OF DAYS LIKE IN 07, 08 SORT OF THING. WE ARE TALKING ABOUT THE MARKET HAS TO COME TO CERTAIN NEW REALITIES AND ADJUST VALUATION TO THOSE NEW REALITIES, AND WHILE THEY ARE ADJUSTING TO THOSE NEW REALITIES, THERE WILL BE BLOOD. HA, NO. THERE WILL BE VOLATILITY.
TEPPER ON WHAT HE LIKES TO SEE
I LIKE TO SEE IS WHEN SOME OF THOSE BIG STOCKS WITH BIG EMERGING MARKET COMPONENTS, THEIR PEs COME DOWN. SHOW ME THAT. SHOW ME WHEN HEDGE FUNDS AREN'T IN THE LAST TWO YEARS WITH INCREASED VOLATILITY AND THEY ARE OUT OF THIS LAST TWO-YEAR RANGE. SHOW ME THAT. SHOW ME WHEN MUTUAL FUND CASH LEVELS ARE A LITTLE BIT HIGHER THE WAY THEY WERE IN THE PAST FIVE YEARS BEFORE THESE LAST TWO YEARS. SHOW ME THAT. SHOW ME THOSE THINGS MAYBE I'LL JUMP BACK IN THE WATER AGAIN.
TEPPER ON CHINA MISTAKES
THEY JUST KEEP MAKING POLICY MISTAKE, AFTER POLICY MISTAKE, AFTER POLICY MISTAKE OVER THERE. I THINK ITS A LEARNING CURVE TO GET ON TO MARKET ECONOMY. YOU COULD SAY THAT. MAYBE ONE DAY THEY WILL GET IT, BUT IT IS HARD WHEN YOU HAVE SOMEBODY ON A LEARNING CURVE. ITS GOOD WHEN SOMEBODY IS A 1 OR 2 TRILLION ECONOMY ON A LEARNING CURVE. IT IS KIND OF BAD WHEN THEY ARE $10 TRILLION OR $11 TRILLION ECONOMY, AND THEY INFLUENCE MORE THAN A THIRD OF THE WORLD'S ECONOMIES. IT IS BAD FOR THEM TO BE ON A LEARNING CURVE.
TEPPER ON ALIBABA
DAVID TEPPER: WE DO NOT OWN ALIBABA
ANDREW ROSS SORKIN: ANYMORE?
TEPPER: NO, WE SOLD THAT PROBABLY – AS I WAS TELLING YOU OFFLINE, WE WERE INVOLVED IN CHINA. I WAS READING THE SITUATION THERE WRONG. I THOUGHT THEY WERE EASING WHEN THEY REALLY WERE NOT EASING. I LOST MONEY IN THE CHINESE MARKET.
TEPPER ON APPLE
I OWN IT, SO I AM GOING TO SAY IT IS GREAT AND EVERYTHING ELSE. IT IS A LOW MULTIPLE. YOU GUYS WERE TALKING ABOUT IT EARLIER TODAY, I THINK. LISTEN, I WOULD AGREE WITH SOME OF THOSE THINGS. IT IS ALWAYS GOING TO HAVE A LOWER MULTIPLE BECAUSE THERE IS SOMETHING THAT – IT IS STILL A DEVICE COMPANY, EVEN THOUGH PEOPLE THINK IT CANT BE REPLACED, SOMETHING COULD COME ALONG. WE HAVE SEEN IT OVER TIME AND THINGS HAPPEN. I THINK IT IS A CHEAP STOCK. IT DOES HAVE A LOT OF CHINESE EXPOSURE FOR ITS GROWTH, WHICH IS A BIT OF A PROBLEM. BUT THE MULTIPLE IS LOW SO I CAN DEAL WITH IT.
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