Doug Kass: Bet Against Apple with This Trade

He’s famed for his prowess as a short-seller, and now strategic investor Doug Kass is taking on the ultimate short - he's betting against Apple .

Kass, who is a CNBC Contributor, believes the preoccupation with Apple has almost become a mania.

“Just consider the time Fast Money devotes to Apple every night,” he says with a grin in his voice. “I go to cocktail parties in Palm Beach and every non-investment professionals owns only one stock, and that's Apple. Even the shoeshine boy owns Apple!” Kass explains.

And Kass thinks that’s a problem.

“What the wise man does in the beginning – the fool does in the end.”

Going forward Kass sees cause for concern. He points to a 3 negative catalysts:

- worsening macro-economic conditions
- potential for supply chain disruptions
- increased platform competition.

All told, Kass sees every reason for Apple to pull back.

However, shorting Apple has been a treacherous trade. The road is littered with bodies of pros who have been killed by betting against Apple. Kass admits even he's gotten scarred in the past when he’s shorted Apple.

But he's convinced the stock is frothy, so rather than short Apple he suggests another trade.

“My way of playing it now is shorting the QQQ’s,” says Kass. “Apple is 16% of the index – there’s another 84% to spread out that risk.”



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And on a related note, Kass also tells us he's still negative on the market at these levels. "The market appears trapped in a range between 1300 - 1400," he says. "The next leg is probably lower."

Read More:
> Doug Kass: Next S&P Move Likely 4-5% Lower
* Kass is also president of Seabreeze Partners and a contributor to the, Jim Cramer’s Real Money Pro web site.

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Trader disclosure: On March 7, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Najarian is long (AAPL); Najarian is long (FIO); Najarian is long (VMW); Najarian is long (P); Najarian is long (CRM); Najarian is long (FSLR); Najarian is long (VERX); Najarian is long (CIGX); Najarian is long (CME); Najarian is long (CBOE); Finerman is long (AAPL); Finerman is long (JPM); Finerman is long (HPQ); Finerman is long (GOOG); Finerman is short (IWM); Finerman is short (SPY); Finerman is short (MDY)

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