Leon Cooperman of Omega Advisors lists a host of reasons why he remains optimistic about the market, telling CNBC that this bull market is not yet over.
First on this list is that if a bear market were to begin today, it would be the first bull market to end without the Federal Reserve actually tightening interest rates. In the eight market cycles since the mid-1950s, stocks, on average, have gone on to produce gains for the 30 months after the first rate hike.
The second point he makes is that bear markets take place in advance of a recession, and he makes the case that a recession seems unlikely.
Cooperman thinks stocks are trading in their fair value range – not over or underpriced – and equities remain one of the best alternatives for investors, although he does go on to say the periods of 20-percent gains for the S&P 500 we have seen over the last few years since the 2009 bear market low are over. One area that looks attractive to Cooperman is energy stocks and he says oil has entered the “bottoming zone”.
Cooperman voices concern about the level of high-frequency and computerized trading that is occurring, which he says accounts for about 75% of daily trading volume today. “In the world I grew up in, and the world Warren Buffett grew up in, when something went down you wanted to own more, and in the world that we’re in now, it goes up you want to own more and it goes down you want to own less, and that’s just counter-intuitive. It lacks common sense,” he said.