This year's stock-market rally has powered Appaloosa Management to stratospheric returns, and firm founder David Tepper doesn't see anything wrong with that.
Tepper said that Appaloosa's gross returns for 2013 are "well into the 40s" in an interview yesterday with Bloomberg Television. And despite stocks shattering record after record, Tepper said he doesn't think that equities are overvalued.
"I know there's talk about bubbles," Tepper said. "This is not one." Stocks remain historically inexpensive in spite of the Standard & Poor's 500 Index's 26% jump this year, he insisted.
The Appaloosa chief did say that the markets might retrench by 5% or 10% when the Federal Reserve finally begins to cut back on its monthly bond-buying program—and that he's shorting U.S. Treasury bonds as a hedge.
As for his own success in 2013, Tepper credited Appaloosa's "big play in the market," airlines. He also said that he is bullish on Japan and is still investing in U.S. and European banks.