The wit and wisdom of Leon Cooperman - Week of May 3 2021

Tiresome rotating

It was a bad week for semiconductors. Concern about recession and chaos hung over the stock market – that was early 2020. These were just the regular worries of people with money. Then the Pandemic struck, and there was a sort of house cleaning… a purging in the sense that tons of people lost their jobs and the economy stopped. But rich people could work from home (due to the creation of e-commerce, etc), if they worked, and life went on. Now taking things down a notch seems to be being followed by a notch up, or “boom”.

The boom coincides with the flight from high tech into cyclicals and value has been most noted this year. I have seen this before, as money moved from NASDAQ to S&P 500, or from commodities into currencies or bonds. What it says now is that a boom is coming, and high tech is less sterling. “When growth is abundant, you don’t pay a premium for it says Christopher Harvey at Wells Fargo Securities as reported by Ben Levinsohn in ‘Value is looking even more like the new growth’ in Barrons.

At the same time as this transpires, a lot of jockeying is going on for a position for a future with some more inflation. People worry about things, and sometimes things happen. GDP is expected to grow in 2021 by 6.4%.

On the year

Dow +13.63% | S&P +12.69% | Ndq +6.70% | Au -3.66%   | Rus +16.74%

Billionaire Leon Cooperman Says Bond Market Is in a Bubble - Bloomberg

A fun interview on Bloomberg this week featured Leon Cooperman, who is retired, managing his retirement investments. Similarities with your intrepid reporter end about there.

He has like a lot of people of our generation a tendency to speak in anecdotes, which, relevant or not, say something about something, if you are listening.

Tho sliding into twilight time he still can raise Democrat's hackles. Per Wikipedia, in an interview on CNBC, Cooperman started crying over the potential Warren wealth tax and its implications on his billion dollar fortune. His crying over the hypothetical tax increase was then used as part of a Bernie Sanders 2020 presidential campaign advertisement. 

So - pass the salt! And onions! And without further ado, back to our story. - Baruch Bernard

Above you have a short coda from the overall interview. Down here below you have a fuller portion of his {(Zoom) like everything these days, even tho the pall is lifting}interview.

Let's pick it up midway...

let me explain i got my mba from

columbia business school on january 31st

of 67.

i was broke i had a student loan and a

six-month-old child is now

approaching 55 okay i had no money in

the bank

and i couldn't afford a vacation so i

went to work the next day

i started my career at goldman on

february 1st of 67th

the dow was roughly a thousand and in

1982

14 years later it was roughly a thousand

so i think we borrow for the future i

expect very little action from the s p

uh uh everything i look at which

suggests to me

caution intermediate to longer term would be rule of the day.

What about bitcoin?

the only bitcoin i owe let me just say

this on

nfts bitcoin stuff like that you talk to

somebody else because

i tell people that i turned 78

a week ago and basically i'm too old i

don't understand that stuff

it's crazy to me it makes no sense i own

a little bit of gold but compared to my

net worth i own very little

okay and basically i'm basically a stock

uh you know a meat and potatoes guy i'm

a stock guy

stocks make more sense than anything

else because of fed policy

but when the fed policy changes i think

the market's going to have a response to

that.

in a bear market

the winner is he who loses least wins 

so

you know when the market goes down i'm

going to lose money i'll be worth less.

i understand that every asset has been

inflated by monetary policy every asset

whether it's real estate etc you know

stocks uh bonds for sure i think the

bubble

is not so much the stock market the

bubble i think is the bond market.

and i would say [if] this turns out to be

wrong - you know i've had a negative view

of bonds for

for quite a long time - but if that view

turns out to be wrong

and interest rates belong where they are [then]

you don't make double digit returns in

the stock market.

The message is things are okay in the intermediate future. There will disruption next year as the Fed shifts gears. The markets could very well end up at the same number they are already at when it is said and done. Leon will have less money than he might have otherwise. 

And in Boy Scout terms: Be prepared.

Billionaire Leon Cooperman Says the Fed Is Too Accommodative -Bloomberg