Kass: Short Bank Stocks Right Now

Hedge fund manager Doug Kass said he is selectively shorting U.S. financial stocks, which have more than doubled since bottoming in early March, on the belief that they have been "priced to perfection" ahead of the banks' stress test results later on Thursday.

"From my perch, investors should sober up and reduce their holdings in financials now," Kass said in a note to clients. "Financial stocks are now priced to perfection."

The KBW Bank Index .BKX of 24 large lenders, including 14 that are subject to the stress tests, jumped 25.8 percent in the first three days of this week and had more than doubled since bottoming on March 6.

Source: MoneyNews - May 7, 2009