Courtesy of Benzinga.
This afternoon hedge fund manager Leon Cooperman appeared on CNBC to talk about the markets.
Cooperman started with an attack on high frequency trading, stating that it should be banned. Cooperman blamed it for the recent volatility, which he said was scaring the retail investor out of the market. Cooperman stated that the SEC should put in place the uptick rule which would be preferable way over the alternative solution of levying a tax on trades.
Cooperman Stated that he did not own government treasuries at all. He stated that investors who held them were losing ground to inflation, and that investors could do much better with other assets.
Cooperman stated that his choices were cash, government bonds, high yielding bonds and equities. He stated that treasuries made no sense, cash was unattractive because of Bernanke’s policies, and high yielding debt was unattractive for various reasons. Therefore, Cooperman stated that equities were the most attractive.
Cooperman stated that the average equitiy is about 13.5 times earnings and yielding 2%. In the last 50 years, the S&P multiple has averaged 15 times. When the S&P multiple averaged 15, the 10-year government bond averaged 6.67%.
He stated that his S&P 500 target was about 1400-1450.
On tech, Cooperman stated that he would put new money into Google (NASDAQ: GOOG)–a stock he called cheap, with a great balance sheet and good revenue growth. He thought that Google was at a reasonable valuation.
On financials, Cooperman stated that they have more room to run. He mentioned JP Morgan (NYSE: JPM), Bank of America (NYSE: BAC), and Citi (NYSE: C).
On oil, Cooperman stated that if oil prices go much higher, it will become a negative factor on their outlook. Cooperman stated that while the economy can handle $135 brent, oil price was broadly an area of concern.
Cooperman finished on a political note, stating that if the Democrats control congress and Obama remains president, American citizens should consider leaving the country.
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