“I suspect the market is 5-8% overvalued,” says famed market timer Doug Kass.
Kass appears to be among the growing number of market skeptics who worry that stocks will pullback sharply as Operation Twist draws to a close.
“The US monetary cliff at June’s end has grown more conspicuous with the publication of the Fed Minutes on Tuesday," he says. "It’s going to scare a lot of investors out of risk assets.”
Combine that development with the slew of other headwinds such as politics, fiscal imbalances, high unemployment and other challenges that Kass has identified in the past and, all told, he concludes that the path of least resistance is lower.