Leon Cooperman at the 2019 Delivering Alpha conference in New York on Sept. 19, 2019.
Adam Jeffery | CNBC
Billionaire investor Leon Cooperman expresses his bearish stance on the broader stock market, citing the risk of a fiscal crisis that the market is underestimating. Speaking at CNBC’s Financial Advisor Summit, Coopperman stated, “I’m of the view that we borrow from the future with very profligate fiscal policy. Ultimately, we will have a crisis in public sector finance, and the market is not discounting a crisis. Overall, I expect very little from the market.”
The chair and CEO of the Omega Family Office highlights the unprecedented stimulus that has resulted in pulled-forward demand and an artificial economic situation. The U.S. national debt recently surpassed $33 trillion for the first time.
Due to his long-term pessimism, Cooperman is not interested in buying stock market benchmarks. Instead, he is on the lookout for bargains in individual stocks.
S&P 500
“The market has been, as you know, extraordinarily bifurcated. If you take out the Magnificent 7, the overall market has done nothing and maybe it’s down a little bit or flat,” stated Cooperman. “I’m not interested in the S&P. I’m interested in individual stocks.”
According to Cooperman, it would be highly unlikely for the S&P 500 to surpass 4,600 this year. The large-cap benchmark has recorded a 13% increase and is currently trading around 4,344.
When it comes to investment advice, Cooperman recommends favoring cheap stocks, followed by short-dated Treasuries, and avoiding long-term bonds. Some of his preferred value stocks include Canadian energy producers Tourmaline Oil and Paramount Resources.
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