Definitely Still Bullish on Stocks: Appaloosa's Tepper

Hedge fund titan David Tepper, founder and president of Appaloosa Management, told CNBC on Tuesday he's still bullish on stocks and investors shouldn't worry about the Federal Reserve tapering its massive bond-buying program.

"There better be a true [Fed] taper or else you might be back into the last half of 1999," Tepper said in a " Squawk Box " interview. "So like guys that are short, they better have a shovel to get themselves out of the grave."

"If the Fed doesn't taper back, we're going to get into this hyper-drive market," he explained. "It's a backwards argument. To keep the markets going up at a steady pace the Fed has to taper back."

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His appearance on "Squawk" in September of 2010 sparked what was dubbed "The Tepper Rally," after he said the Fed's asset-purchase program virtually guaranteed strength in stocks. Since then, the Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) and the S&P 500 (^GSPC) have each gained about 45 percent. (Read More Below the Video.)

Tepper, whose Appaloosa delivered an after-fee annual return of 30 percent in 2012, compared the reason for being in stocks to the ending of the movie "My Cousin Vinny," saying the evidence is overwhelming.

By his calculations, he said there's $400 billion in the economy looking for a place to go and stocks are one of those places. Tepper said he's nervous to be short anything because there's so much cash out there.

The last time Tepper was on CNBC, he said stocks were cheap and on "Squawk" Tuesday he said he still feels that way.

Tepper said he still has a position in Apple (AAPL) and it should perform with the market, adding Apple should be okay if the next new product is revolutionary or evolutionary.

He said his biggest holding is still Citigroup (NYSE:C), but holds a small position in another big bank, JPMorgan Chas (JPM)e, which is facing calls to split the chairman and the CEO roles currently held by Jamie Dimon.

Tepper didn't want to comment directly on the JPMorgan situation, but said he generally favors those jobs as separate.

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