Appaloosa Management

David Tepper, founder of $12.4 billion hedge fund Appaloosa Management sat down for a rare interview with CNBC this morning. He says that over time he has compounded 40% for himself and compounded 30% for his investors over the course of 17 years. In his chat, he revealed that he is moving into stocks because if the economy does well, stocks will do well. Conversely, he thinks bonds and gold will not. Interestingly, he believes the Federal Reserve is acting as a put for his strategy because if the economy worsens, the Fed will help with quantitative easing (QE). You can see what stocks are in Appaloosa's portfolio in our newsletter: hedge fund wisdom.
Appaloosa Management typically allocates 70% of their capital to bonds and 30% to stocks. Given Tepper's commentary, it's evident that he's increasing his equities allocation due to the perceived opportunity.

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