Leon Cooperman plans to choose his path to success, not expecting much more from the global market
Leon Cooperman in CNBC’s âHalf-Time Reportâ.
Scott Mlyn | CNBC
Billionaire investor Leon Cooperman said on Tuesday that stock selection is the key to superior returns going forward, as the global market has stagnated after a historic rebound from the pandemic.
âAs far as my long-term outlook goes, to be honest with you, stocks are the best place to be, but I just wouldn’t expect much from major averages,â Cooperman told CNBC Financial Advisors Summit. “I am ready to be in this kind of environment where I have to choose my path to success.”
The president of the Omega Family Office is still heavily invested in stocks and believes the Federal Reserve’s view on inflation will support the market. The S&P 500 rose more than 14% in 2021 and hit a new high on Tuesday.
âThe cyclical forces that determine the market outlook are fundamentally positively positioned and that is why I am heavily invested,â Cooperman said. “We have a central bank that wants more inflation. Until that changes, I think the market is probably in good shape.”
Despite recent hot inflation figures, the Fed maintains its view that any spike in price pressure will be temporary as the economy recovers from the recession. A key indicator of inflation that the central bank uses to set policy rose 3.4% in May year-over-year, the fastest rise since the early 1990s.
Cooperman argued that companies will be able to defend their profit margins by passing inflation on to consumers by raising prices.
âEveryone is worried about inflation. Inflation is positive for common stocks because inflation in corporate costs is passed on to selling prices, which increases the nominal level of income and profits. ‘Inflation becomes a problem for the market when the central bank moves to curb inflation,’ Cooperman said.
The investor said he was watching the dollar’s exchange rate very closely, along with signals from the Fed and overall economic performance to assess whether he wanted to have a foothold.
In terms of individual stocks, Cooperman revealed that one of his biggest holdings is fintech firm Fiserv, which he says has an attractive valuation. He said he also owns Chinese internet companies Baidu and Alibaba.