In an interview with Bloomberg TV that aired yesterday, the billionaire chairman and CEO of Omega Advisors hedge fund, Leon Cooperman, listed off a few reasons why stock markets have more upside than down. And he came up with those answers in just over two minutes. Here goes:
1) There have been eight Fed interest-rate cycles since the mid-1950s. “This would be the first market peak that occurred without one Fed tightening,” said Cooperman, noting that the market has tended to rise for two-and-a-half years on average after an initial rate hike.
2) Bear markets aren’t born of “immaculate conception. They come about for a reason. Recession, overvaluation, a hostile Fed, or geopolitical events,” he said, adding that at least the first three aren’t present.
3) “The individual investor in the last seven months has taken $100 billion dollars out of the market,” he said, then quoted legendary investor John Templeton on how bull markets are born from “pessimism, grown on skepticism, mature on optimism and die on euphoria.” There’s no sign of that last one, according to Cooperman.
4) The market has already had a “significant correction,” and the average common stock is 20% off its high over the last 52 weeks.
5) “What’s the alternative to common stocks? Buy bonds at 2%? Sit in cash earning zero?” he asked.
6) The valuation of the market is very reasonable. “We’re in line with historical norms. Over the last 50 years, the S&P multiple averaged 15. It’s currently 16,” said Cooperman.
1) There have been eight Fed interest-rate cycles since the mid-1950s. “This would be the first market peak that occurred without one Fed tightening,” said Cooperman, noting that the market has tended to rise for two-and-a-half years on average after an initial rate hike.
2) Bear markets aren’t born of “immaculate conception. They come about for a reason. Recession, overvaluation, a hostile Fed, or geopolitical events,” he said, adding that at least the first three aren’t present.
3) “The individual investor in the last seven months has taken $100 billion dollars out of the market,” he said, then quoted legendary investor John Templeton on how bull markets are born from “pessimism, grown on skepticism, mature on optimism and die on euphoria.” There’s no sign of that last one, according to Cooperman.
4) The market has already had a “significant correction,” and the average common stock is 20% off its high over the last 52 weeks.
5) “What’s the alternative to common stocks? Buy bonds at 2%? Sit in cash earning zero?” he asked.
6) The valuation of the market is very reasonable. “We’re in line with historical norms. Over the last 50 years, the S&P multiple averaged 15. It’s currently 16,” said Cooperman.
Ами значи чичо Уорън е доста щедър - тази облизвация ми харесва.
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