Hedge fund billionaire David Tepper, who may already have signaled in a recent filing that he is less bullish on markets, is now "on guard" in his approach to trading, according to someone familiar with the matter.
Tepper, whose Appaloosa Management has roughly $19 billion in assets under management, is neither too long nor too short, this person told CNBC — and the fund manager thinks the biggest risk to trading stocks in the U.S. right now is attempting to "out-think the market." If investors don't like what they're seeing as the S&P 500 and other indexes hit repeated all-time highs, they should put some money in cash rather than going too short, the source added.
Tepper believes that valuations, while on the high side, aren't overly rich in many tech and blue-chip stocks, added the person, and that central bank stimulus, which has distorted bond markets around the world already, may be starting to affect stock markets as well. The message from Tepper, who in May of 2014 jarred markets by warning "don't be too frickin' long" when the S&P was at 1,889, could be summed up as "don't be too frickin' short either," this person says.