Reuters/ Rick Wilking
- Leon Cooperman said stocks have further to fall as the Ukraine war and the Fed rock markets.
- The S&P 500 has fallen sharply this year, but the billionaire investor still thinks it’s moderately overvalued.
- Despite his pessimism, Cooperman told CNBC stocks remain “the best asset in a bad neighborhood.”
Billionaire investor Leon Cooperman believes stocks have further to fall, as the impact of the Ukraine conflict and central banks’ monetary policy shakes markets.
The benchmark S&P 500 stock index is still mildly overvalued, he told CNBC Wednesday, adding “conditions are going to deteriorate to some degree.”
US and global stocks have fallen sharply this year as central banks prepared to withdraw their pandemic-era support for economies, and after Russia’s invasion of Ukraine blindsided investors. The S&P 500 was down 8.7% for the year as of Wednesday’s close.
Cooperman’s belief that stocks are headed for a deeper drop means he will be “aggressively selling” any rises in equities, he said.
The veteran investor, 78, is the CEO of Omega Advisors and is a highly respected former hedge-fund executive who now largely invests his own money.
He told CNBC the situation in Ukraine is serious for investors, as it’s very hard to work out what will happen next. He called Russian President Vladimir Putin a “madman.”
Cooperman said US fiscal and monetary policies have been “very inappropriate” and have fueled a buildup in debt and inflation.
The Federal Reserve on Wednesday began to change course away from its pandemic-era stimulus programme by hiking interest rates for the first time since 2018, as it tries to tackle the strongest inflation rate in 40 years.
Despite his self-proclaimed pessimism, Cooperman said stocks remain “the best asset in a bad neighborhood.”
There are still some well-performing and cheap companies to be found in the US, according to the investor. He said that energy stocks look attractive to him, given the recent rises in the price of oil and other commodities.
Cooperman noted he is sticking by tech titans Microsoft and Google, saying he doesn’t think they’re “excessively valued.”
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