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Leon Cooperman told Insider in an interview he thought stocks were overvalued.
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The billionaire investor said he didn’t expect the S&P 500 to hit a fresh high for a long time.
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Cooperman said a “rolling correction” was underway and house prices were likely to drop.
Leon Cooperman shared his belief that stocks are currently overvalued and predicted that the S&P 500 would not reach new record highs for a significant period of time.
In an interview with Insider, the billionaire investor and philanthropist expressed a more pessimistic outlook, despite his history of being bullish. Cooperman attributes this change in sentiment to the dramatic increase in asset prices caused by more than a decade of near-zero interest rates and excessive government spending, which has artificially stimulated demand. According to Cooperman, this trend cannot continue indefinitely, and there will be consequences.
Although Cooperman holds a more cautious view, he does not go as far as other market experts like Jeremy Grantham and John Hussman, who have identified a potential bubble. Instead, he describes the current situation as a “rolling correction” and anticipates a protracted period to resolve the existing issues.
Cooperman’s projection includes a subdued performance for the S&P 500, which has delivered substantial returns in recent years. He believes it will underperform in the coming years and not surpass its current record level of approximately 4,800 points for an extended period. As a result, Cooperman advises against investing in index funds, suggesting that a more selective approach to stock picking will be more successful.
Cooperman also discussed the housing market, which experienced a significant surge in prices during the first seven months of this year despite rising mortgage rates. He attributes this development to several factors, including a long-standing shortage in new home construction and potential sellers hesitating to list their homes due to the high interest rates that would accompany purchasing a new property.
Cooperman expects home prices to decline due to the current affordability crisis. Many potential buyers are unable or unwilling to pay the inflated prices and take on substantial mortgage payments. He draws attention to the fact that while a small number of technology stocks have propelled major indexes to new heights, excluding these select names, overall stock performance has been stagnant.
This year, Cooperman has raised concerns about the stock market on multiple occasions. In February, he predicted that the S&P 500 would bottom out around 3,100 points, a significant decrease from its peak in January 2022. Additionally, he expressed apprehension about Nvidia’s stock surge of approximately 200% this year, suggesting it may not end well.
Read the original article on Business Insider
