Prove Yourself Smarter Than Your Local Billionaire

In this week's issue of "Are You Smarter Than Your Local Billionaire?" we examine a few words from a Mr. David Tepper. Tepper, for those who've been stuck in an Excel template for the last 5 years, is the founder of Appaloosa Management and the guy who the New York Times named in March of this year as the top-earning hedge fund manager in the world in 2009.

For further musings on Tepper, I refer you all to this New York Magazine profile on Tepper, which is fascinating and portrays Tepper as a guy who has, for various reasons (professional and otherwise), had issues with being Fuck-You rich. The title of the article is "Ready to Be Rich," and while part of me thinks (while sarcastically clapping), "well, we're all so happy for you, David, that you're finally ready to embrace your piles and piles of f*cking money," the guy has made some very smart (and ballsy) bets, routinely brings astronomical returns for his investors, and very likely deserves his revered status among distressed-debt (and every other group of) investors.

Regardless of Tepper's personal quirks, the guy is notoriously shy about granting interviews, so when he goes on CNBC and offers a few soundbytes, you seize the opportunity. Especially when he displays some optimism(!):

“Either the economy is going to get better by itself in the next three months...What assets are going to do well? Stocks are going to do well, bonds won't do so well, gold won't do as well, or the economy is not going to pick up in the next three months and the Fed is going to come in with QE.

"Then what's going to do well? Everything, in the near term (though) not bonds...So let's see what I got—I got two different situations: One, the economy gets better by itself, stocks are better, bonds are worse, gold is probably worse. The other situation is the fed comes in with money."

So, essentially, Tepper is saying that all asset classes are going up whether the economy recovers or not -- and the guy may very well be right in assuming that, in nominal terms, the major averages will lift when and if the Fed does it a little easing ... but, being a pro investor, the guy is only concerned with near-term nominal performance (which I would argue is a macro problem in our economic psychology) ... and perhaps the very inflation Tepper speaks of that will boost all yachts on a rising tide might still KO the underlying economy-thingy? ... Fed hubris ... continuing to believe it can keep long-term interest rates from rising ... bonds could wake up ... yadda yadda ...

But, I want to stay out of this, and I want to hear your thoughts -- I want to see you guys prove yourselves smarter than Tepper, as ridiculous as that task may seem. Hey, even if you think he's right, prove him wrong, maybe I'll send him your resume.

And, if you get nervous at any point, just look at the accompanying picture of Example #1 of the Great Nerd Fro -- an elusive and endangered specie.