Barton Biggs: I’m Buying Stocks in the Market Pullback

Barton Biggs of Traxis Partners spoke to Bloomberg about today’s stock market plunge. Biggs said that “we are into a panic sell-off that is “very crazy”, and he’s worried about a double-dip recession.

httpv://www.youtube.com/watch?v=uvjjRaD3f2E

Biggs on whether today’s declines make stocks more attractive:

“By definition, I was wrong yesterday in the thinking we were in the process of making a bottom, and in actuality we had a little rally. Usually, you do not have a cliff-bottom. You mill around a little bit and retest the lows and so on. I thought we were going to do that. It sort of look like we were at the close yesterday. This is a new ball game. It has clearly broken through the lows. We are into a panic sell-off. It is very scary. It is very scary because of the secondary consequences that it is going to have on consumer confidence and on business confidence. So, it is bad stuff. Is the market oversold? Yeah, I am 100% convinced that it is. That does not mean it cannot get more oversold.”

On where he thinks the bottom is:

“I do not know where the bottom is. I am basically 50% net long. I covered a little bit yesterday. I am now 60% net long and I wish I was not. I wish I was 10% or 20% net long. Considering where I am, I would like to see something a little more definitive, rather than to step into this panic here. We have seen this before. We had the flash crash a couple of years ago. Just by the nature of markets and the level of prop trading and high-frequency trading volume, these things can happen. Jeez. They are no fun.”

On the reason behind today’s panic selling:

“There is no question that the original reason was the lack of confidence in the authorities, in other words the politicians, and their ability to deal with this thing, and the Europeans did not do a big enough package to solve their sovereign debt issue. We have had this really half-ass compromise, where we did not really deal with the whole entitlements issue. There has been a loss of confidence. I’m astounded at how severe the reaction has been.”

On whether the U.S. should be worried about what’s going on in Europe:

“Yeah, I suppose it should be.  After all, Europe is an economy that is about the same size in total as we are.  They are really going to mangle this thing, Italy, the banks in Italy and Spain will be undermined, that will result in Europe going into a recession. That is what people are worried about. I do not know whether they should be or not, but it is clear that the Europeans did not put together a big enough package to solve the problem. Now, since they did not do that, they will have to do a much bigger package, maybe even do fiscalization of Europe in order to save the euro.”

On whether he’s seeing any buying opportunities:

“I see all kinds of buying opportunities. The problem is I already own part of them. I think Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) and Goldman Sachs (NYSE:GS), stuff like that are attractive buys. Absolutely. I already own them. After getting banged in the face yesterday, I am not too inclined to step in there again just yet.”

On tomorrow’s jobs report and how it will impact the markets:
“No one knows, but I do not think it will be a dramatic number, either positively or negatively. Investors are worried about a double-dip recession in the U.S. and Europe. Sure [I’m worried about a double dip]. I’m worried about a nuclear explosion on Long Island, too.  There’s all kinds of things to be worried about.”

More from The Cheat Sheet