Bear Doug Kass ‘Staying the Course’

Despite being on the wrong side of the recent stock market rally, Doug Kass maintained his bearish outlook, he said Thursday on CNBC's "Fast Money."

"We're moving toward an ah-ha moment in the market where people begin to realize that these bouts of QE over four years have not produced escape velocity in the domestic economy," he said. "The domestic economy is not self-sustaining. Wealth in the stock market is not trickling down. And we saw flat revenues in the first quarter. Yes, earnings were up 3½ percent, but half of that was from buybacks. There's an artificiality in both bond prices and stock prices."

Kass said that he had misjudged the effect of quantitative easing by the world's central banks.

"I underestimated the impact that global monetary easing would have and that there were few alternatives to equities," he said.

(Watch Video: Doug Kass Takes on Goldman Sachs)

But Kass said that he remained bearish.

"I'm staying the course. I think this market is extremely fragile," he added. "I don't see it in a lot of strong hands."

Kass also noted the lack of broad conviction.

"I see a lot of computer-driven trading, a lot of short-term-oriented hedge funds chasing performance without real conviction, and a lot of retail investors who are scared out of the market," he said. "There aren't a lot of Warren Buffetts, who I visited in Omaha two weeks ago. There aren't long-term investors with real conviction, with the exception of Leon Cooperman, who are willing to hold stocks through thick and thin."

(Read More: Doug Kass, Still a Berkshire Bear)

Kass also announced that he was back in Apple.

"I paid $443.65 this morning," he said.

"It's generally recognized that Apple's profits now will be basically flat for a couple of years, showing little growth, likely between $35 and $45 a share, but the free-cash-flow generation is going to be meaningful, and it's going to support continued buybacks and dividend increases," Kass added. "We have a 2.8 percent yield today. Investor sentiment could hardly be worse."

(Read More: Doug Kass: I Blew It On Apple Target)

Trader disclosure: On May 23, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long JPM; Stephanie Link is long CSCO; Stephanie Link is long FB; Stephanie Link is long EBAY; Stephanie Link is long WFC; Stephanie Link is long COST; Joe Terranova is long JULY CRUDE OIL FUTURES; Joe Terranova is long MINI S&P FUTURES; Joe Terranova is long VRTS; Joe Terranova is long SJM; Joe Terranova is long AAPL; Joe Terranova is long SPLK; Joe Terranova is long TBT; Joe Terranova is long SWN ; Joe Terranova is long IBM; Pete Najarian is long AAPL; Pete Najarian is long BAC CALLS; Pete Najarian is long C CALLS; Pete Najarian is long GS CALLS; Pete Najarian is long JPM CALLS; Pete Najarian is long WFC CALLS; Pete Najarian is long XLF CALLS; Pete Najarian is long INTC CALLS ; Pete Najarian is long BBRY; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long FB CALLS; Pete Najarian is long MSFT; Pete Najarian is long C; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long BAC; Anthony Scaramucci is long GS; Anthony Scaramucci is long JPM; Anthony Scaramucci is long MS; Anthony Scaramucci is long WMT; Anthony Scaramucci is long GOOG; Doug Kass is long AAPL.


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