How The Pros Do It: Tepper Added 75% To Longs After Saying “Now A Good Time To Take Money Off The Table”

Tepper did it again.

Recall that exactly one year ago, we wrote about David Tepper’s latest TV appearance on BBG TV, when we reported that “David Tepper Dumps 40% Of US Equity Exposure Despite Claiming “Stocks Inexpensive” in which we said the following:

At the start of Q4 2014, Appaloosa’s David Tepper made a series of statements – dismissing Bill Gross as irrelevant (nope – turmoil caused by PIMCO unwinds roiled credit markets), calling the end of the bond bull market (nope – yields went on make lower and lower lows), and finally proclaiming that stocks were inexpensive and multiples not high. So, one wonders, if stocks were inexpensive and multiples not high, why did Appaloosa dump 40% of its US equity exposure in that quarter (only to end the quarter with even more exuberance proclaiming that stocks could rise another 10% in 2015)? It appears that when David Tepper says “buy”, he means “buy… from me.”

Fast forward several months when just after the August market crash which sent the S&P to its first date with 1,812, Tepper was again on CNBC and made a series of bearish prognostication:

“I have problems with earnings growth [and] problems with multiples,” he said. “So I can’t really call myself a bull [near-term].”

Acknowledging he was not as definitive as usual, he said he’s “not loving it,” but if stocks were to fall 20 percent or so he’d be a buyer. He added that he still believes the market will go higher in the long term.

He added that “it might be a good time to take money off the table.”

That’s what he said. What did he do?

According to his latest 13F as the market was surging in the last quarter of 2015, Tepper was busy buying. So busy in fact, that he took his total long notional exposure as disclosed in Appaloosa’s 13-F from a modest $2.9BN as of September, to $5 billion as of the end of the year, an increase of 75%, in the process adding 40% to his longs. Needless to say, stocks were not “dropping 20%”, in fact quite the opposite – they were surging into the year end Santa Rally.

To be sure, we don’t know what Tepper was doing with the short side of his book, as well as his credit/CDS exposure, but one thing is clear: when it comes to his longs, as Tepper was urging CNBC’s viewers to take money of the table, he was waving much of it in.

As a reminder, this is a man whose one bullish (or bearish) word on financial TV could “dramatically alter market sentiment.”

And that’s why David Tepper is a billionaire.