David Tepper says he is careful playing this speculative market game, noting that it did not end well in 1999

Investors who have been around for a long time and are playing the speculative game currently unfolding in the market should be careful, said David Tepper, founder of Appaloosa Management.

“It was partyon.com in 1999 that screwed the shorts, and now it’s gangup.inc. It didn’t end well in 1999 when the dot com bubble appeared. Thursday.

The billionaire investor went on to stress that investors need to be cautious amid a frenzy of business activity and high valuations. When things turn, they can turn sharply.

The influence of retail investors – most evident in GameStop – has captivated the streets in recent days and speaks to a new class of traders who have grown up amid the pandemic.

Individual investors create short-term pressures by stacking names that hedge funds bet against, forcing funds to rush in to cover their losses. This usually pushes stocks even higher. Retail investors promote their business on WallStreetBets Reddit’s board of directors, which has north of 3 million members.

Some of the more popular names are GameStop and AMC. The former is up over 1,700% this year, while the movie chain giant has seen its stock climb over 800% this year.

Earlier in January, Tepper told CNBC’s Jim Cramer he had a more positive view of the market as the Covid vaccine rollout continued. Additionally, with continued support from the Federal Reserve, he said it was difficult to bet against the current market.

“I don’t mean to say he’s extremely optimistic. I would say he’s very constructive,” Cramer said of his conversation with Tepper. “He saw it coming. He knew he had to get out, and now he feels that there are pockets you should be in, pockets of very reasonable estimates.”

Last February, Tepper issued a warning about the impact of the pandemic on stocks, which proved to be premonitory.

On February 1, shortly before stocks began to decline as the pandemic forced the world to lock down, Tepper told Cramer he had become cautious in the market because of the virus. “You have to be careful because it can be a game changer. So you have to be careful,” Tepper said.

– CNBC’s Kevin Stankiewicz contributed reporting.