Jeff Zelevansky/Reuters
- Leon Cooperman dismissed fears of an imminent market downturn.
- The billionaire investor defended "big tech" valuations and called for fiscal discipline.
- Cooperman is wary of meme stocks and sees minimal value in owning government bonds.
- See more stories on Insider's business page.
Leon Cooperman ruled out an imminent market crash, warned that stimulus efforts are ballooning the national debt to dangerous levels, and emphasized the appeal of "big tech" stocks in a CNBC interview this week.
The billionaire investor, who converted his Omega Advisors hedge fund into a family office in 2018, also dismissed government bonds as virtually worthless and some meme stocks as ridiculously overvalued.
Here are Cooperman's 10 best quotes from the interview, lightly edited and condensed for clarity:
1. "The conditions for a bear market are just not present. Bear markets don't materialize out of immaculate conception." – Cooperman pointed to recession fears and rising inflation as potential drivers of a downturn.
2. "Inflation becomes a problem when the central bank begins to fight inflation, because fighting inflation is tantamount to curbing growth."
3. "We've already injected into the economy $1 trillion of stimulus in excess of wages lost. The central bank and the fiscal authorities are focused exclusively on employment, they're not worried about the debt creation. I worry about it because debt's growing too rapidly, it's not sustainable. We are heading for a fiscal crisis one of these days. "
4. "The most dangerous instrument today is buying a long-term US government bond. Basically you're getting your capital confiscated. I could buy a lot of stocks that have a much better valuation profile than the US government bond." - noting that bonds are almost worthless when yields are low, 40% of any profit goes toward taxes, and inflation is trending at 3% or higher.
5. "There's nothing overvalued in today's interest-rate environment except the bonds. Look at Google, Facebook, Microsoft, Amazon - if you believe the economy's gonna grow and interest rates are gonna stay where they are, they're not overvalued." - Cooperman's family office owns shares of those four "big tech" companies.
6. "I'm a stock jockey, I like what I own. I'm having no trouble finding things that I wanna own. I have an eye on the exit because monetary policy and fiscal policy have pulled demand forward and this game and this party, when it ends, is not gonna end well."
7. "These algorithms know nothing about value, they know everything about price. I try and bring some sanity to the picture." - blaming increased volatility on quantitative trading and changes to market structures.
8. "It'll be Fed speak, it'll be inflation, it would be the overall performance of the economy, it would be gold and bitcoin which represent speculative fever, it would be the stock market itself. I watch everything like a hawk. Most importantly, I watch what I own." - listing some of the factors that might lead him to cash out his holdings.
9. "Six or eight months from now, we'll start to see liquidity coming out of the market and I'll have a different view of the market."
10. "I stay away from the Robinhood stocks. I don't get the valuations, they're crazy. Some of these Robinhood stocks, some of these 100x revenue stocks with no earnings, that's where the correction has been greatest. And when I look at them, they still look overpriced."