Leon Cooperman: Equities Are The Best House In The Neighborhood, But I Don’t Like The Neighborhood!

In his latest interview with Bloomberg, Leon Cooperman explained why equities are the best house in the neighborhood, but he doesn’t like the neighborhood. Here’s an excerpt from the interview:

Cooperman: Well actually I would taking a slightly different approach. I’m shocked that interest rates are as low as they are. You know for most of my career there was a real return associated with buying a bond. The bond nominal yield was in excess of inflation.

We have an inflation rate in this country with quote eight percent. You have real growth a couple percent. You have nominal GDP growing at ten percent. And you have the ten-year bond at three percent. Makes no sense. And that makes everything in the stock market look attractive.

I’m basically… I’m of the view that equities are the best house in the financial asset neighborhood but I don’t like the neighborhood for a lot of reasons. So I have a cautious view.

I’ve been a seller on strength and not a buyer on weakness. We are already tracking a significant pullback in discretionary spending, exposing vulnerabilities across high-growth digital equities from subscription streaming platforms to operators of online casinos and luxury retail networks. I think that ultimately the price of oil, or the Fed, or maybe the strong dollar will lead us into a recession, and when the recession hits, which will be a 2023 event when it hits, not 2022, that the market will find the bottom somewhere between 35 or 40 percent below its peak of 4800.

You can watch the entire discussion here: