Top value strategist Leon Cooperman says that, while stocks are not cheap, the factors that would cause a bear market are “just not present” right now.

Cooperman tells the new Wall Street Week that one of four factors usually triggers a bear market: signs that a recession is coming, frothy sentiment or euphoria, geopolitical events, or the Federal Reserve “taking the punch bowl away”. Geopolitical events are impossible to predict, he says; when it comes to the other three potential triggers, they just aren’t there right now, he adds. Cooperman says he is intrigued by the “fixation” investors have with the anticipated Federal Reserve rate hikes. The beginning of rate hikes does not constitute a taking away of the punch bowl, he says. In fact, he says that historically stocks have risen just under double digits in the first year of a tightening cycle, as the start of rate increases usually is a sign that the economy and profits are strong. Problems only set in, he says, when rates reach a point at which they become competition for stocks. Cooperman also offers his take on active management, and discusses what he is looking for in a 2016 presidential candidate.

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