Hedge-fund manager Doug Kass says stock-market bulls need to wake up

Just keep swimming.

That’s been the message for investors these days. Stay afloat because we’ve had the best start for stocks since 1987. A mixed bag of earnings, another potential government shutdown and questions over a trade deal haven’t triggered an “everyone-out-of-the-pool” moment. Yet.

But welcome to Thursday, where things are looking more jittery than they have in awhile, a day after the S&P parted ways with a 5-day winning run.

First time since Jan. 30 #ES_F (30min) <200sma pic.twitter.com/RcFpB6x4ak

— Alastair Williamson (@StockBoardAsset) February 7, 2019

Worry lines are all over our call of the day, from Doug Kass, president of hedge fund Seabreeze Partners Management, who warns that “bull market complacency is back.”

Blogging at Real Investment Advice, Kass says investors are ignoring a “diminished outlook for economic and profit growth in 2019-2020,” noting that “there was nothing in the recent high-frequency data or earnings reports that changes this outlook.”

We’ve got a stock market that has “detached itself from reality,” he says. “Often, as might be the case, sharp and unrelenting advances lull us into a false sense of security, particularly when global economic growth is so fragile and beginning to show signs of deteriorating,” said Kass, though he repeats from an interview earlier this week that he’s not talking about investor euphoria similar to that seen in late January or mid-September of last year.

But others are out there ringing similar alarm bells. Take Russ Mould, AJ Bell investment director, who told clients Thursday that he’s concerned about the renewed blind love for well-known tech stocks right now.

“If you asked an investor would they be willing to pay $2.9 trillion for a company that was going to show virtually no earnings growth in 2019, after a year when operating profit and free

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