“We’ve had a very conservative view and we continue to have a very conservative view. I don’t see the conditions that would suggest the market is attractively valued.”
In a wide-ranging conversation with Bloomberg Television, Leon Cooperman, the billionaire investor made it clear that his cautious stance on equities hasn’t changed. “Valuations are too high,” he said. “I look around the world and I see the market at a high at 24 times earnings… and the multiple seems far too high and it’s high against current interest rates.”
Interest rates, in fact, are one of his biggest concerns. “The ten year and longer sector are going to go up, not down,” Cooperman warned. “If interest rates are not going to go up, then the stock market be okay. But I think interest rates are going to climb higher.” He even suggested a 10-year could rise to “6% or higher.”
So what would turn him bullish again? “I think the thing that would make me positive, to be honest, is stocks acting better in response to bad news… Market tops are made on good news. Market bottoms made on bad news.”
Despite his overall caution, Cooperman still sees opportunity in individual stocks. “I made my money by picking stocks.” His top holding? Mr. Cooper, a mortgage company. “We have an enormous profit thanks to management… We think this merger with Rocket Mortgage is terrific… a lot of free cash flow. And we really see good growth ahead.”
Another recent pick is Atlas Energy Solutions. “You know, this is a very well-run company… we were buying as low as $6. It sells $18… there’s been significant purchase of stock by management.”
Cooperman’s biggest worry, however, isn’t the market—it’s Washington. “I’m very disturbed about our fiscal condition… We’re heading to financial disaster… The amount of debt outstanding is ridiculously high and nobody’s focused on it.”
Yet, there’s still a spark. “What excites me is buying in Mr. Cooper and having a go from 6,7,8 to 125… not because I’m greedy… all my money is earmarked for charity.” He adds: “My only envy of people like Bill Gates and Bernie Marcus… they have a lot more money to give away.”
At 80, Cooperman still loves the game—not just for the returns, but for what those returns enable him to give back.
You can watch the entire interview here:
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