Billionaire investor Leon Cooperman rules out an imminent market crash, trumpets ‘big tech’ stocks, and sounds the national-debt alarm in a new interview. Here are the 10 best quotes

Leon Cooperman holding his glasses up to his right temple.
Leon Cooperman.

  • Leon Cooperman dismissed fears of an imminent market downturn.
  • The billionaire investor defended “big tech” valuations and called for fiscal discipline.
  • Cooperman is wary of meme stocks and sees minimal value in owning government bonds.
  • See more stories on Insider’s business page.

Leon Cooperman ruled out an imminent market crash, warned that stimulus efforts are ballooning the national debt to dangerous levels, and emphasized the appeal of “big tech” stocks in a CNBC interview this week.

The billionaire investor, who converted his Omega Advisors hedge fund into a family office in 2018, also dismissed government bonds as virtually worthless and some meme stocks as ridiculously overvalued.

Here are Cooperman’s 10 best quotes from the interview, lightly edited and condensed for clarity:

1. “The conditions for a bear market are just not present. Bear markets don’t materialize out of immaculate conception.” – Cooperman pointed to recession fears and rising inflation as potential drivers of a downturn.

2. “Inflation becomes a problem when the central bank begins to fight inflation, because fighting inflation is tantamount to curbing growth.”

3. “We’ve already injected into the economy $1 trillion of stimulus in excess of wages lost. The central bank and the fiscal authorities are focused exclusively on employment, they’re not worried about the debt creation. I worry about it because debt’s growing too rapidly, it’s not sustainable. We are heading for a fiscal crisis one of these days. “

4. “The most dangerous instrument today is buying a long-term US government bond. Basically you’re getting your capital confiscated. I could buy a lot of stocks that have a much better valuation profile than the US government bond.” – noting that bonds are almost worthless when yields are low, 40% of any profit goes toward taxes, and inflation is trending at 3% or higher.

5. “There’s nothing overvalued in today’s interest-rate environment except the bonds. Look at Google, Facebook, Microsoft, Amazon – if you believe the economy’s gonna grow and interest rates are gonna stay where they are, they’re not overvalued.” – Cooperman’s family office owns shares of those four “big tech” companies.

6. “I’m a stock jockey, I like what I own. I’m having no trouble finding things that I wanna own. I have an eye on the exit because monetary policy and fiscal policy have pulled demand forward and this game and this party, when it ends, is not gonna end well.”

7. “These algorithms know nothing about value, they know everything about price. I try and bring some sanity to the picture.” – blaming increased volatility on quantitative trading and changes to market structures.

8. “It’ll be Fed speak, it’ll be inflation, it would be the overall performance of the economy, it would be gold and bitcoin which represent speculative fever, it would be the stock market itself. I watch everything like a hawk. Most importantly, I watch what I own.” – listing some of the factors that might lead him to cash out his holdings.

9. “Six or eight months from now, we’ll start to see liquidity coming out of the market and I’ll have a different view of the market.”

10. “I stay away from the Robinhood stocks. I don’t get the valuations, they’re crazy. Some of these Robinhood stocks, some of these 100x revenue stocks with no earnings, that’s where the correction has been greatest. And when I look at them, they still look overpriced.”

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UBS chairman apologizes for Archegos loss and promises to enforce more transparency

2013 05 02T120000Z_519329562_GM1E9521DHR01_RTRMADP_3_UBS.JPG
Swiss bank UBS Chairman Axel Weber speaks during the company’s general shareholders meeting in Zurich on May 2, 2013.

  • UBS chairman apologized for the loss the Swiss bank suffered amid the Archegos meltdown, in an interview with Bloomberg.
  • Chairman Axel Weber blamed the lack of oversight particularly in family offices, which don’t have to disclose information about investments.
  • Weber said UBS is conducting an internal investigation into the fiasco.
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UBS Group Chairman Axel Weber apologized for the loss the bank suffered amid the Archegos Capital Management meltdown in March.

The Swiss bank announced a surprise $861 million loss in relation to the liquidation of fund manager Bill Hwang’s Archegos family office, which had highly leveraged positions in a handful of stocks.

Weber in an exclusive interview on Bloomberg TV blamed the lack of oversight particularly in family offices – entities typically established by wealthy families – which don’t have to disclose information about the firm to regulators, unlike hedge funds.

Weber urged regulators like the US Securities and Exchange Commission to enforce more transparency, adding that without action from official agencies, UBS itself would force more transparency at the bank.

“If it’s not enforced by regulators, we will enforce it because we need that information,” Weber told Bloomberg Wednesday. “If we finance activity, we want these disclosures and if clients are unwilling to give that, well there may be other banks that give them that same exposure, but it won’t be us.”

Given the “unusual” situation, Weber revealed that UBS is conducting an internal investigation to get to the root of the issue. The chairman did clarify that they are not subject to regulatory action.

“We’re not very happy with this event,” he said. “I’m hyper-focused on this …We’ve not changed our risk appetite. This was not within what should have happened. So we need to get to the bottom.”

Weber also clarified that no one will be stepping down at the bank as a result of the episode, adding that it was the process that needed improvement.

“I don’t see a single failure of a single part of the organization,” he said. “But what I do see is that the number of combinations that interacted wasn’t very good and so we need to improve each and every element of that so that those interactions don’t happen again.”

UBS, the world’s biggest wealth manager, joins Credit Suisse, Nomura Holdings, and Morgan Stanley which all lost billions of dollars in the wake of the Archegos blow-up.

The implosion of Archegos caused widespread chaos on Wall Street and exposed the fragility of the financial system, especially in lesser-known areas of the market such as total return swaps.

The founder grew his family office’s $200 million investment to $10 billion but did not need to register as an investment advisor since he was only managing his own wealth.

Hwang, a former Tiger cub, reportedly lost a staggering $8 billion dollars in 10 days.

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Archegos chief Bill Hwang donated huge amounts of Amazon, Netflix, and Facebook stock to his private foundation. Those gifts would be worth $950 million today

Bill Hwang
Bill Hwang of Archegos Capital Management.

  • Bill Hwang donated Amazon, Netflix, and Facebook shares to his private foundation.
  • The Archegos chief’s Grace and Mercy Foundation cashed them in for $325 million.
  • Grace and Mercy could have sold the shares for nearly $950 million today.
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Bill Hwang, the investor who lost $20 billion in two days when his family office imploded in March, donated technology stocks to his private foundation that would be worth almost $950 million today.

The Archegos Capital Management boss – whose portfolio was swiftly dismantled when his leveraged stock bets soured and he defaulted on his lenders’ margin calls – is the cofounder of the Grace and Mercy Foundation, a Christian charity that helps the poor and oppressed.

Grace and Mercy’s tax filings, reviewed by Insider on ProPublica, show Hwang donated around 121,000 Amazon shares, 945,000 Netflix shares, and 51,000 Facebook shares to the foundation over the past decade. Grace and Mercy sold those shares for about $325 million in total between 2017 and 2018, scoring a handsome $186 million gain.

However, if the foundation had kept the gifts instead of selling them, they would fetch around $946 million today, reflecting the three stocks’ price gains in recent years.

Grace and Mercy also bought shares in Amazon, Netflix, Apple, Expedia, and other companies, its tax filings show. It cashed them in for a total of $200 million between 2014 and 2016, notching a $103 million gain.

Those shares would be worth $722 million today, including Amazon stock worth $449 million and Netflix shares worth $219 million.

Grace and Mercy, which boasted nearly $500 million in assets at the end of 2018, may have cashed in Hwang’s stock gifts because it needed to finance grants to charities and fund its operations. But it undoubtedly left money on the table by selling them.

Hwang is one of several “tiger cubs” who left billionaire investor Julian Robertson’s Tiger Management to start their own funds. He shut down Tiger Asia Management in 2012 after pleading guilty to insider trading in federal court, and launched Archegos in 2013.

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