Doug Kass going moving to Cash and expects a 5% to 10% Decline

theStreet.com's Doug Kass going on record today, moving his holdings from 15% to 29% cash and most importantly citing Four factors suggest that the U.S. equity market is now vulnerable to a decline of 5% to 10%. Doug also laid out his long term picks which include Dell (NASDAQ:DELL), AT&T (NYSE:T), Freeport-McMoRan Copper & Gold (NYSE:FCX) and many more.

Four factors suggest that the U.S. equity market is now vulnerable to a decline of 5% to 10%:

1. The scope and duration of the recent market advance seem to have discounted a second-half production boom.

2. An uneven and shallow economic recovery that could double-dip in early 2010, coincident with higher interest rates and a hike in individual tax rates, is becoming more likely.

3. We're seeing some early signs of emerging technical deterioration.

4. Bullish sentiment is rising.

In conclusion, above-average cash positions should now be held in light of a possible market correction and in order to have excess reserves to capitalize on opportunities available in a volatile trading environment.

Long Model Candidates

Technology: Previous selections (Apple (AAPL), Cisco (CSCO), Research In Motion (RIMM) and Oracle (ORCL)) are now fully priced and have been dropped from my buy list. Remaining are Microsoft (MSFT), Dell (DELL) and Qualcomm (QCOM).

Financials: I'm dropping mortgage REITs and Visa (V). Remaining are Bank of America (BAC), SunTrust (STI), Regions Financial (RF) (convertibles), Legg Mason (LM), Prudential (PRU), MetLife (MET), Hartford (HIG), PNC (PNC), State Street (STT), Berkshire Hathaway (BRK.A), Cohen & Steers (CNS), Weingarten (WRI) (convertibles), SL Green (SLG) (convertibles), Chubb (CB), Loews (L), National Financial Partners (NFP) (convertibles) and Sallie Mae (SLM).

Energy: Dropping extended integrated oils and several oil service companies. Remaining are Transocean (RIG), select master limited partnerships (MLPs).

Health Care: Select depressed HMOs -- a true contrarian play!
Consumer Staples: Procter & Gamble (PG), General Mills (GIS), Unilever (UN).

Industrials: 3M (MMM); PPG (PPG), Union Pacific (UNP).

Consumer Discretionary: Home Depot (HD), Lowe's (LOW), Disney (DIS), Nike (NKE), Wal-Mart (WMT), eBay (EBAY), Starbucks (SBUX).

Materials: Freeport-McMoRan Copper & Gold (FCX), BHP Billiton (BHP).

Utilities: Duke Energy (DUK), Dominion Resources (D), PG&E (PCG).

Telecom: Verizon (VZ), AT&T (T).

SOURCE: http://www.thestreet.com/story/10515527/1/the-kass-model-portfolio--updated.html