Leon Cooperman (Trades, Portfolio) is the founder and chairman of Omega Advisors. Previously, Cooperman was the CEO and Chairman of Goldman Sachs Asset Management. He worked at Goldman Sachs for 25 years before leaving in 1991 and starting Omega Advisors. After a very public fight with SEC, Cooperman turned his operation into a family office.
The Guru recently appeared in a CNBC interview to talk about business and the new coronavirus, Covid-19. The first question to answer is about the market and the impact of an event like the Covid-19 outbreak on businesses. According to Cooperman, the significance of an event on the market was discounted in the beginning.
Cooperman says he's lost a lot of money as of late because of this. However, to have a strong opinion on the current market environment, you need two things:
1) Knowledge about the virus. What is the coronavirus going to do? What effects will it have? Cooperman takes an optimistic take. He thinks the virus will be resolved by June.
Cooperman calls out the valuation of companies such as Tesla (TSLA, Financial) and Virgin Galactic (SPCE, Financial). The Fed has created a very speculative environment. We are likely not far from a low, but given where multiples are, overvalued companies will likely add on debt and trade it for equity (this powers the buyback cycle).
2. Insight into the presidency. Will we get a Democrat or a Socialist president, or keep Trump? Cooperman doesn’t want to rely on a divided government to freeze him. In his opinion, Bernie Sanders is a bigger threat to markets than the virus. Cooperman believes the virus will be history by June and the focus will shift.
Disclosure: no positions
Read more here:
- Ariel Investments' Bobrinksoy Isn't Panicking Over Covid-19
- Warren Buffett: Coronavirus May Affect Berkshire Meeting
- Why I'm Happy to Be Long on Underperforming Berkshire
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
Also check out:
