-
Leon Cooperman expects stocks to fall this year and worries about soaring national debt.
-
Stocks are already pricing in strong earnings and an improving economic outlook, he said.
-
The billionaire investor believes Tesla CEO Elon Musk, the richest person in the world, is overpaid.
Stocks look expensive and expected to fall this year, the national debt is a ticking time bomb and Elon Musk is overpaid, Leon Cooperman said.
“When you look at everything that’s happening in the world and you see the market growing 21 times, it seems too rich to me,” the billionaire investor said. told CNBC Tuesday.
He was referring to the price-to-earnings ratio of the S&P 500, which jumped 24% last year and climbed another 4% to record highs this year.
Cooperman, who converted his hedge fund Omega Advisors to a family office in 2018, noted that the stock market defied bearish forecasts last year.
“Everyone is now positive and so I think by the end of the year we may be going down,” he said, advising investors to adopt a “cautious attitude”.
The former head of Goldman Sachs’ asset management division ignored recent gains beat by companies such as Meta And Amazonsaying stocks were already pricing in strong corporate profits and a better economic outlook.
Fears of a slowdown have faded this year thanks to strong growth and jobs data, inflation falling below 4% in recent months and the Federal Reserve signaling it may cut interest rates shortly after raising them from near zero to over 5%. Cooperman suggested the central bank could cut rates two or three times this year.
“I’m not calling for a recession, but I’m saying I think the market has ignored the good news,” he said. “We borrowed against the future and that’s why the market performed well.”
The seasoned investor warned about public debt, which has swollen from $23 trillion to a record $34 trillion over the past decade, was “out of control.”
“No one knows when things are going to hit the fans,” Cooperman said. “Either it doesn’t matter or one day it will matter, and I think it will matter one day.”
“Overcompensated”
Cooperman also took aim at Musk’s salary, Delaware judge says struck Tesla CEO’s $55 billion compensation plan starting in 2018.
“He’s a genius but he’s overcompensated,” Cooperman said of the only person on the planet with a net worth over $200 billion, according to the report. Bloomberg Billionaires Index.
He invoked Warren Buffett’s policies quote that compensation consultants should be called “Ratchet, Ratchet & Bingo” because they always increase executive pay.
Cooperman’s latest outlook is hardly sunny, but it has improved since October, when he told Business Insider he expected a recession as well as further increases in interest rates to combat stubborn inflation.
Read the original article on Business Insider
