In a CNBC interview held last week, billionaire Leon Cooperman shared insights regarding recent market trends and influences. The billionaire founder of Omega Advisors made the following points:
- FAANG stocks, which he says represent about 10% of his portfolio, have sound valuations based on expected earnings. The biggest threat, argues Cooperman, is the U.S. government, which wants to “pick their pockets.”
- Inflation, Cooperman contends, is a “plus for common stocks” since higher costs become incorporated into a company’s selling prices and, in turn, lift nominal levels of revenues and earnings. “It becomes a problem,” Cooperman says, when the Fed begins fighting inflation by slowing growth. But right now, the central bank wants more growth and inflation.
- During the recent market swoons, Cooperman said his firm did no selling, but rather “put more money to work.”
- The billionaire argued vehemently against what he called “crazy” derivative financial products, asserting that they could destroy “one of the best capital markets in the world.” The recent market swoons, he said, had “nothing to do with economics.” Fundamentals are strong, he says.