Robinhood is going public. Warren Buffett, Michael Burry, and other top investors have blasted the trading app and warned day traders to be careful.

Michael Burry against a gray promotional backdrop for the movie "The Big Short."
Michael Burry.

  • Robinhood is poised to go public on Thursday at a $32 billion valuation.
  • Warren Buffett, Michael Burry, and other top investors have blasted the trading app as reckless.
  • Market veterans have also warned day traders against rampant speculation and taking on debt.
  • See more stories on Insider’s business page.

Robinhood is set to go public on Thursday at a potential $32 billion valuation, capitalizing on booming demand from retail investors seeking to trade stocks, cryptocurrencies, and other assets during the pandemic.

The trading app is popular among amateur investors and day traders because it doesn’t charge commissions, allows fractional investing, and trusts its users to trade on margin and buy and sell risky, complex financial products such as options.

However, Warren Buffett, Michael Burry, and other leading investors have accused Robinhood and its peers of encouraging speculation and excessive risk-taking. They have also warned market newbies not to borrow too much, trade things they don’t understand, or treat investing like a game they’re guaranteed to win.

Robinhood didn’t immediately respond to a request for comment from Insider.

Here’s what 10 top investors have said about Robinhood and the day-trading boom. Their quotes have been lightly edited and condensed for clarity:

Warren Buffett

Warren Buffett
Warren Buffett, the chairman and CEO of Berkshire Hathaway.

“There’s nothing illegal about it, there’s nothing immoral. But I don’t think you build a society around people doing it. I hope we don’t have more of it.” — accusing Robinhood of encouraging users to trade options rather than invest for the long term. (May 2021)

Michael Burry

Michael Burry against a promotional backdrop for the movie "The Big Short."
Michael Burry, the star of “The Big Short” and head of Scion Asset Management.

“If you do not use #robinhood, you have to see it to understand what #gamification of #stonks/options means. So here it is. If this looks like a serious investing app to you, and NOT a dangerous casino ‘fun for all ages,’ you’ve been #gamified.” (February 2021)

 

Mark Cuban

Mark Cuban speaking at Business Insider's IGNITION conference on December 3, 2018.
Mark Cuban, the “Shark Tank” star and Dallas Mavericks owner.

“It’s not investing, and it’s almost not even trading, it’s more like revenge. It is the revenge of the nerd. It’s the revenge of the little guy.” — commenting on the horde of retail investors who sparked the meme-stock boom (February 2021)

“If you’re a day trader and you can walk and chew gum, you are making money right now. You’re doing the same thing they did in the late ’90s. You’re rolling it. You think everybody is a genius in a bull market.” (June 2020)

Chris Sacca

chris sacca
Chris Sacca, the founder of Lowercase Capital and an early investor in Uber, Twitter, and Instagram.

“I have axes to grind against a lot of the guys you’re wrecking, and I love to hear about real people stacking chips. But, please, from someone who has been there … don’t trade what you can’t afford to lose.” — advising the retail investors who executed short squeezes and hammered hedge funds to be careful (January 2021)

“To the angry Robinhood bros who got into trading stocks this year: I was wrong. You’re amazing. This has nothing to do with the market. It’s all you and your mad skillz. Don’t take profits off the table. Double down, on margin. Borrow everything you can. Stonks never go down!” — sarcastically responding to the backlash from day traders after he tweeted they got lucky and should cash out some of their profits (January 2021)

Charlie Munger

charlie munger
Charlie Munger, Warren Buffett’s business partner and Berkshire Hathaway’s vice-chairman.

“Robinhood is beneath contempt. It’s a gambling parlor masquerading as a respectable business. It’s basically a sleazy, disreputable operation.” (May 2021)

Leon Cooperman

Leon Cooperman holding his glasses up to his right temple.
Leon Cooperman, the former CEO of Omega Advisors, runs a family office now.

“They are just doing stupid things. This will end in tears.” — commenting on retail traders buying shares in bankrupt companies and making other high-risk trades (June 2020)

Jim Chanos

Jim Chanos
Jim Chanos, the president and founder of Kynikos Associates.

“They are going to trade themselves into oblivion. We are at prices now where the crowd that is betting on margin and betting through options had better be right. Anything that corrects and reverts to the mean, or to real valuation metrics, is going to destroy a whole generation of investors.” (November 2020)

Jeffrey Gundlach

Jeffrey Gundlach
“Bond King” Jeffrey Gundlach, the CEO of DoubleLine Capital.

“There’s been an incredible increase in tiny retail investor activity in terms of the accounts on Robinhood and other platforms that have just exploded in term of size. I think that’s pretty dangerous. These people that are buying slices of the stock market don’t even know what they’re doing, and have probably lost money already.” (June 2020)

“We’ll have a tremendous unwind of a lot of the money that thinks the stock market is a one-way thing.” (March 2021)

Howard Marks

Howard Marks
Howard Marks, the cofounder and co-chairman of Oaktree Capital Management.

“Some people think it’s a gambling game, like betting on football. It’s not healthy to have people who are buying stocks for fun. It reminds me of the people who were day trading in 1999 and declaring day trading a ‘can’t miss’ strategy. The tech stocks crapped out in 2000.” (June 2020)

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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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Michael Burry, Jeremy Grantham, and other top investors are predicting an epic market crash. Here are their gravest warnings so far.

Michael Burry against a promotional backdrop for the movie "The Big Short."
Michael Burry.

  • Michael Burry, Jeremy Grantham, and other experts are predicting an epic market crash.
  • Jeffrey Gundlach, Leon Cooperman, and Stanley Druckenmiller expect a downturn too.
  • Here are the gravest warnings so far from eight top investors and commentators.
  • See more stories on Insider’s business page.

Michael Burry and Jeremy Grantham are bracing for a devastating crash across financial markets. They’re far from the only experts to warn that rampant speculation fueled by government stimulus programs can’t shore up asset prices forever.

The billionaire investors Leon Cooperman, Stanley Druckenmiller, and Jeffrey Gundlach have also sounded the alarm. The same is true for the “Shark Tank” star Kevin O’Leary, the market prophet Gary Shilling, and the “Rich Dad Poor Dad” author Robert Kiyosaki.

Here are the most striking warnings from these 8 market experts:

Michael Burry

Michael Burry against a gray promotional backdrop for the movie "The Big Short."
Michael Burry.

Burry in June described the markets as the “greatest speculative bubble of all time in all things” and said retail investors were buying into the hype around meme stocks and cryptocurrencies before the “mother of all crashes.”

Earlier this year, the investor of “The Big Short” fame, who runs Scion Asset Management, pointed to Tesla, GameStop, bitcoin, dogecoin, Robinhood, and the red-hot US housing market as signs of speculative excess.

Read more: Goldman Sachs says buy these 20 stocks that have the most upside potential right now — including 5 set to surge by at least 50%

Jeremy Grantham

Jeremy Grantham against a blurry background.
Jeremy Grantham.

Grantham in January said the market was a “fully fledged epic bubble” and described it as the “real McCoy.”

“When you have reached this level of obvious super-enthusiasm, the bubble has always, without exception, broken in the next few months, not a few years,” the legendary investor and GMO cofounder said.

“We will have to live, potentially, possibly, with the biggest loss of perceived value from assets that we have ever seen,” Grantham added.

Leon Cooperman

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

Cooperman expressed deep concerns about financial markets in May.

“Everything I look at would suggest caution, intermediate to long term, would be the rule of the day,” the billionaire investor and Omega Advisors boss said. “When this market has a reason to go down, it’s going to go down so fast your head’s going to spin.”

But Cooperman described himself as a “fully invested bear” because factors that typically cause bear markets — rising inflation, recession fears, a hostile Federal Reserve — weren’t present.

Read more: How to mine doge: An 18-year-old TikTok influencer shares his process for earning crypto without directly buying via a $700 rig — and explains how it works for other altcoins including litecoin

Stanley Druckenmiller

Stanley Druckenmiller speaking and gesturing against a black-and-orange background.
Stanley Druckenmiller.

Druckenmiller said in May that the bull market reminded him of the dot-com boom, but he cautioned that asset prices could continue rising for a while.

“I have no doubt that we are in a raging mania in all assets,” the billionaire investor and Duquesne Family Office chief said. “I also have no doubt that I don’t have a clue when that’s going to end.

“I knew we were in a raging mania in ’99, but it kept going on, and if you had shorted the tech stocks in mid-’99, you were out of business by the end of the year,” Druckenmiller added.

The investor indicated he would pull his cash out of equities in a matter of months.

“I will be surprised if we’re not out of the stock market by the end of the year, just because the bubbles can’t last that long,” he said.

Jeffrey Gundlach

Jeff Gundlach speaking against a black background.
Jeffrey Gundlach.

Equities are undeniably expensive, Gundlach said in March.

The billionaire investor and DoubleLine Capital boss said that claiming the stock market was “anything other than very overvalued versus history” was “just to be ignorant of all the metrics of valuation.” He predicted that stocks would fall by upwards of 15% when the downturn comes.

Gundlach, known as the “bond king,” predicted that the retail investors who had piled into meme stocks and other speculative assets wouldn’t stick around once prices started dropping.

“We’ll have a tremendous unwind of a lot of the money that thinks that the stock market is a one-way thing,” he said.

Read more: Famed investor Michael Burry is predicting the ‘mother of all crashes’. Here’s what 9 other key ‘Big Short’ players are doing now.

Kevin O’Leary

Kevin O'Leary speaking and pointing on "Shark Tank."
Kevin O’Leary.

O’Leary said in April that stocks would eventually crumble, but he framed the downturn as an educational opportunity for rookie investors.

“Buying the dip is more rock-and-roll, but what invariably happens is you go through a massive correction and you learn a very important lesson,” the “Shark Tank” star and O’Leary Funds chief said.

“The generation that is trading right now has never gone through a sustained correction. It’s coming — I don’t know when, I don’t know what’ll trigger it, but they will learn their lesson,” he continued.

“If you have a lot of leverage on, it’s a hell of a lesson because you end up in a negative net-worth position,” O’Leary added. “But you do learn from it.”

Robert Kiyosaki

Robert Kiyosaki against a green background.
Robert Kiyosaki.

Kiyosaki tweeted in June that he was expecting the greatest market crash ever.

“Biggest bubble in world history getting bigger,” the personal-finance guru and author of “Rich Dad Poor Dad” said. “Biggest crash in world history coming.”

Kiyosaki has accused the Federal Reserve of overstimulating markets and devaluing the dollar. He’s advised investors to prepare for the downturn by stocking up on precious metals and cryptocurrencies.

“ARE YOU READY?” he tweeted in April. “Boom, Bust, Mania, Crash, Depression. Mania in markets today. Prepare for biggest crash, depression in world history. What will Fed do? Print more money? Save more gold, silver, bitcoin.”

Gary Shilling

Gary Shilling against a yellow-and-orange background.
Gary Shilling.

Shilling predicted in April that financial markets would nosedive, but he declined to hazard a guess at when the crash would arrive.

“I’m not making any firm prediction as to when this thing is going to collapse,” the veteran forecaster and president of A. Gary Shilling & Co. said.

“Speculations outrun any logic and that’s probably going to be true of this one,” Shilling continued. “But at some point, boy, there’s going to be a lot of blood on the floor.”

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Top economist Mohamed El-Erian warns of a jobless recovery – and recommends investors ride the liquidity wave

Mohamed El-Erian
Mohamed El-Erian.

  • Mohamed El-Erian warned the US economy could rebound without a jobs recovery.
  • The Allianz economist suggested workers might lack the skills employers want.
  • El-Erian predicted an “everything rally” and advised investors not to cash out.
  • See more stories on Insider’s business page.

Leading economist Mohamed El-Erian raised the prospect of a jobless recovery and advised investors to hold their nerve in a CNBC interview this week.

Pointing to the disappointing US employment data last week, Allianz’s chief economic adviser questioned whether workers have the necessary skills to fill the jobs available. Employers may have embraced new technologies such as AI, robotics, and automation faster than the labor market, he added.

“That’s the biggest fear we have because what we don’t want is a jobless recovery,” El-Erian said. “There’s a massive question mark as to how many will actually be able to get jobs again, or be willing to get jobs again.”

He cited improved unemployment benefits, insufficient childcare, and school closures as other potential drivers of the weak jobs data. If people are earning more by staying home instead of working, and if parents can’t leave their kids at daycare or at school, they might not be filling the jobs available.

El-Erian also recommended investors resist the urge to cash out as inflation fears and signs of market excess mount. “You will get the everything rally,” he predicted, arguing that monetary and fiscal stimulus will continue pumping liquidity into markets and boosting asset prices in the weeks to come.

“Leon Cooperman captured it really well: “Even if you’re worried about the world, you want to be a fully invested bear,'” he added, referring to the billionaire investor’s current stance on markets.

Read the original article on Business Insider

Billionaire investor Leon Cooperman blasted stimulus efforts, flagged a bond bubble, and warned of a brutal market crash in an interview this week. Here are the 11 best quotes.

Leon Cooperman
Leon Cooperman.

  • Leon Cooperman criticized the federal government for pumping up the US economy.
  • The billionaire investor said low interest rates and stimulus are pushing investors to take risks.
  • The Omega Advisors boss warned of a brutal market crash once conditions worsen.
  • See more stories on Insider’s business page.

Leon Cooperman blasted the federal government for juicing a booming economy, predicted rising inflation will prompt an interest-rate hike next year, and warned markets will nosedive once sentiment shifts during a Bloomberg Surveillance interview this week.

The billionaire investor and Omega Advisors chief also blamed the Federal Reserve for investors taking greater risks, highlighted a bubble in the bond market, and questioned the need for greater regulation of family offices.

Here are Cooperman’s 11 best quotes from the interview, lightly edited and condensed for clarity:

1. “It’s the advance of greed basically. The fact that the industry would get into the same predicament again is kinda surprising. The more things change, the more they remain the same.” – comparing the recent collapse of Archegos Capital, which sparked over $10 billion of losses for the banks that lent it money, to Long-Term Capital Management blowing up in the late 1990s.

2. “I’m a retired money manager living on investment income. I run my own money. Why they have the right to regulate me is beyond my wildest dreams.” – questioning the SEC’s plans to increase oversight of family offices.

3. “I describe myself as a fully invested bear.” – Cooperman explained he doesn’t currently see the factors that cause bear markets such as accelerating inflation, a hostile Federal Reserve, and recession fears, but he expects the backdrop to change.

4. “The biggest plus out there is the Fed has created an environment where there’s an absence of alternatives.” – arguing that near-zero interest rates have pushed investors into riskier assets such as high-yield bonds, stocks, and cryptocurrencies.

5. “We are borrowing from the future. Interest rates shouldn’t be where they are, and we should not be injecting so much fiscal stimulus when the economy is growing off the charts.”

6. “The market’s gonna be surprised because the Fed will raise rates sometime in 2022. They’ll be forced to by inflation.”

7. “Everything I look at would suggest caution, intermediate to long term, would be the rule of the day.”

8. “On NFTs, bitcoin, stuff like that – I’m too old. I don’t understand that stuff, it’s crazy to me, it makes no sense. I’m a meat-and-potatoes guy, a stocks guy.”

9. “The bubble is not so much the stock market, the bubble is the bond market.”

10. “They’re not cheap stocks, but they’re not expensive stocks. Nothing is expensive if interest rates stay here.” – commenting on “big tech” stocks and echoing Warren Buffett.

11. “When this market has a reason to go down, it’s gonna go down so fast your head’s gonna spin.”

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Critics say a wealth tax wouldn’t work. Argentina just brought in $2.4 billion with one.

Congress in Buenos Aires, Argentina.
Congress in Buenos Aires, Argentina.

  • A one-off tax on Argentinian’s wealthiest brought in around $2.4 billion for pandemic recovery.
  • The measure was passed in December, as worldwide critics of wealth taxes said they weren’t feasible.
  • Critics say they’re difficult to implement, and the ultrawealthy will dodge them, but Argentina raised more than expected.
  • See more stories on Insider’s business page.

A one-off wealth tax on the wealthiest Argentinians brought in around $2.4 billion to help address pandemic costs, according to the Buenos Aires Times.

In December, Argentina’s Congress voted to pass a levy on those with assets over 200 million pesos, Insider’s Joshua Zitser reported. The measure passed by 42 to 26 votes, although it did see some intense political opposition. According to the BBC, the tax was only set to impact the top 0.8% of the population, and about 10,000 people ended up paying the tax, according to some early data. They saw a levy of up to 5.25% on their total assets.

Argentina’s wealthiest reportedly pushed back on the tax, with some moving to take legal action. Others procrastinated on paying; payments were due April 16, but the Buenos Aires Times reported that only 2% of taxpayers subject to the tax had paid up by early April.

The revenue raised will go toward areas impacted by the pandemic, like housing, scholarships, public health, and relief for small businesses. Overall, the amount that the taxes brought in comes to about 0.5% of the country’s GDP, according to the Buenos Aires Times. The newspaper reported this was a higher amount than expected.

As the subject of wealth taxes has gained steam internationally during the pandemic, critics have emerged, citing issues ranging from feasibility to even legality. Argentina’s example suggests their critiques could be wrong, and wealth taxes have viability.

One-off wealth taxes have emerged as a possible pandemic recovery solution

The International Monetary Fund has said that temporary taxes on the wealthy could help the global economy rebound from the coronavirus recession. That statement from the IMF marked a major shift from its own policies – and perhaps highlights the increased traction of one-off wealth taxes as a way to curb inequality and help economies rebound from pandemic devastation.

Experts in the UK also called for a one-off measure in December, saying it could bring in around 260 billion pounds. The Wealth Tax Commission was proposing a 1% tax on wealth over £500,000 for five years. One-off taxes do have some precedent in the UK, and potential taxes on wealth may still be looming across the pond.

On this side of the Atlantic, Sen. Elizabeth Warren has been an outspoken advocate for a straightforward wealth tax on Americans with a net worth of $50 million or more. Her proposal – which would be permanent – could bring in $1.4 trillion over 10 years. A majority of Americans support a wealth tax as a way to curb inequality.

Read more: Advisors to the wealthy are fielding a frenzy of calls from clients worried about estate planning and taxes. Here’s how they’re navigating the chaos.

One of the most prominent wealth-tax critics has been billionaire Leon Cooperman; he’s said that he doesn’t think a wealth tax is intelligent or legal. He’s also said the ultrawealthy would hide their assets. That’s an assertion that’s been echoed by inequality expert and Nobel Prize-winning economist Angus Deaton: He told Bloomberg that a wealth tax would be difficult to implement, and the wealthy would try to avoid it.

President Joe Biden seems to be opting for taxes that target the wealthy, but don’t necessarily constitute a wealth tax. He’s proposed, among other measures, raising the income tax rate for Americans making over $400,000, upping the tax rates on capital gains, and increasing the corporate tax rate.

“It’s time for corporate America and the wealthiest 1% of Americans to just begin to pay their fair share,” Biden said in his address to the joint session of Congress.

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Leon Cooperman made a bearish stock forecast, said rich people should pay more taxes, and addressed his Elizabeth Warren feud in a recent interview. Here are the 10 best quotes.

GettyImages 472141044
Leon Cooperman decried the public and politicians “attacking the wealthy”.

  • Leon Cooperman said the stock market will be lower a year from now and the Fed will be “surprised” at inflation.
  • He also said wealthy individuals should pay more in taxes but he disagrees with Sen. Warren’s wealth tax plan.
  • The billionaire detailed his “modest” taste and said he recently traded in a 2002 Lexus for a Hyundai.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

In a 22-minute interview with CNBC on Friday, Leon Cooperman said the stock market will be lower a year from today, defended capitalism, and discussed his ongoing back-and-forth with Sen. Elizabeth Warren over the wealth tax. The investor, whose estimated net worth is $2.5 billion according to Forbes, also discussed his “modest” lifestyle choices.

Here are his 10 best quotes:

(1) On his bearish long-term market outlook:

“Let’s face it. The market is facing the fact that taxes are going up, interest rates are going up, and inflation is going up. And we have a reasonably richly appraised market. So cyclically I’m engaged. But I got an eye on the exit,” said Cooperman, who also told CNBC the stock market will be lower a year from today.

(2) On inflation that could surprise the Federal Reserve:

“I think that Mr. Powell will be surprised by inflation. It’s not going to be as quiescent and transitory as he thinks. I think the Fed will be forced to say something before the end of 2022.”

(3) On the “self-correcting” nature of the current market:

“The market has been very self corrective, in the sense that the FAANG stocks are not expensive, but the aspiring FAANG stocks are very expensive, and they’ve been corrected in a serious way. The whole slowdown in the SPAC area is self-correcting.”

(4) On the fixed income market being “overvalued.”

“I don’t understand why someone would want to buy a bond if you’re going to give away 40% to 50% of the coupon to the government and then you have inflation, you’re getting your capital confiscated. I’d rather take my chance on a common stock.”

(5) On the rapid pace of economic growth:

“If you spoke to a hundred economists today and asked them what their view is of the potential real growth of the US economy, the response would be centered around 2%,” Cooperman said. “We’re growing this year four to five times potential, yet the Fed is persistent in keeping interest rates at near zero. That doesn’t make any great sense to me. It’s just pushing people out on the risk curve.”

(6) On his on-going back and forth with Sen. Elizabeth Warren:

Cooperman said he thinks that Warren’s wealth tax is “probably” unconstitutional. “I don’t know her. I don’t vote in Massachusetts, but I think she’s very wrong-minded,” he said.

Read more: Buy these 14 high-quality stocks poised to beat the market as the economy enters a new phase of rapid growth, Credit Suisse says

(7) On the wealth tax:

“I do believe in the progressive income tax structure, I do believe rich people should pay more. The wealth tax makes no sense to me, for lots of reasons. In all the countries it’s been introduced, I think 14 out of 17, it’s been eliminated. And there are so many better ways of going about what [Warren is] looking to accomplish.”

(8) On the success of wealthy individuals:

“How do you get to be very wealthy? You develop a product or service the world wants. Is the world better off or worse off because of Jeff Bezos, Bill Gates, Bernie Marcus, Ken Langone? I think the world is better off.”

(9) In defense of capitalism, and mega-cap companies like Microsoft, Google, Amazon, and Facebook:

“I’m a capitalist with a heart. I don’t have much use of money. I respect money. I lived very modestly, but I believe that what has made America great is our commitment to capitalism. And the fact that we are turning our back in many respects on capitalism is wrong…God knows what we would be going through if we didn’t have those companies in the last few years to help us with this pandemic.” Cooperman said.

(10) His view that material possessions bring “aggravation.”

“I just bought a new car the other day and the car I traded in was a 2002 Lexus- I kept the car for 20 years! And I bought a Hyundai. I’m not a collector of things.”

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Billionaire investor Leon Cooperman says the stock market will be lower a year from now due to higher taxes, rising interest rates, and inflation that will surprise the Fed

leon cooperman
  • Billionaire investor Leon Cooperman said the stock market will be lower a year from now.
  • He sees the higher taxes, rising interest rates, and rising inflation weighing on stocks.
  • Cooperman also said the Fed will be “surprised” at the pickup in inflation.
  • See more stories on Insider’s business page.

Leon Cooperman told CNBC on Friday the stock market will be lower a year from today as stocks face downward pressure from rising interest rates, higher taxes, and inflation.

His comments come just one day after the S&P 500 closed at another record high and brought its year-to-date gains to 12%.

The billionaire Omega Advisors chairman said that he’s currently a “fully invested bear,” and he doesn’t see any conditions that would lead to a significant market decline in the near term.

But he emphasized that the US is “pulling demand forward” and the longer-term outlook is not particularly favorable.

“If you spoke to a hundred economists today and he asked them what their view is of the potential real growth of the US economy, the response would be centered around 2%,” Cooperman said. “We’re growing this year four to five times potential, yet the Fed is persistent in keeping interest rates at near zero. That doesn’t make any great sense to me. It’s just pushing people out on the risk curve.”

Stocks are forward looking instruments, and gained last year amid a pandemic on the expectation of a massive economic rebound in the future. Now that US GDP numbers are demonstrating that a rebound is currently underway, Cooperman is questioning how much further the market can continue its pace of gains.

He also said that the multi-trillion stimulus packages in Washington’s pipeline won’t be the most effective way of bringing the labor market back to pre-pandemic levels, and he’s concerned about debt.

“Who pays when the party’s over?” said the investor. “We’re just racking up debt at an extraordinarily rapid rate.”

Cooperman added that he’s concerned about what rising inflation could do to stocks. While Federal Reserve chairman Jerome Powell continues to say that inflationary pressures will be “transitory,” Cooperman disagrees.

“I think that Mr. Powell will be surprised by inflation. It’s not going to be as quiescent and transitory as he thinks. I think the Fed will be forced to say something before the end of 2022,” Cooperman said.

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Billionaire Leon Cooperman rejects Elizabeth Warren’s invitation to testify on a possible wealth tax

leon cooperman crying about taxes on cnbc
Leon Cooperman.

  • Billionaire Leon Cooperman has rejected Sen. Elizabeth Warren’s invitation to testify on a wealth tax.
  • In a response viewed by Insider, Cooperman said the invitation is “self-serving and disingenuous.”
  • Warren said she gave him a response to make a case instead of “just complaining on TV.”
  • See more stories on Insider’s business page.

Sen. Elizabeth Warren’s invitation to testify at a Senate Finance subcommittee has been rejected by one of her outspoken critics, billionaire Leon Cooperman.

On Monday, Warren invited Cooperman to testify at her hearing, called “Creating Opportunity Through a Fairer Tax System.”

“This hearing is an opportunity to share your views on how to strengthen the nation’s tax system to address economic inequality, raise revenues to fund critical pro-growth investments in families and communities, and bolster our long-term fiscal and economic outlooks,” Warren wrote in her invitation to Cooperman, which was viewed by Insider.

She gave him until Thursday, April 22 to respond; it seems as though he got back to her early, according to CNBC, which first reported on the invitation and Cooperman’s response.

Cooperman has turned down the invitation. In a response viewed by Insider, he wrote: “I find Senator Warren’s invitation self-serving and disingenuous.”

He also noted his continued support for a progressive income tax, and said that Congress should also look into eliminating some tax loopholes.

Cooperman added: “Most importantly, Congress should start examining in earnest how to fund progressive programs through revenue-neutral proposals that would cull bureaucratic waste rather than add further to administrative bloat – again, essential but boring, so not something of interest to most progressive politicians like Senator Warren.”

The two have a long history of vigorous back-and-forth on the wealth tax, a key proposal of Warren’s that she’s continually advocated for – and which Cooperman has continually derided. Their dialogue has included everything from a tweet from Warren asking Cooperman to “pitch in a bit more,” a five-page letter by Cooperman in response, and the inclusion of Cooperman’s position in one of Warren’s presidential campaign ads.

After Warren introduced her Ultra-Millionaire Tax Act, which would enact additional taxes on households with net worths $50 million and above, Cooperman went on CNBC to decry it, saying the rich would simply hide their assets.

In her invitation, Warren wrote: “The opportunity will allow you to fully air your views, not merely in front of the financial news audience where you often express them, but before the entirety of the American people.”

Warren wants a wealth tax to help tackle inequality

Warren has called for a wealth tax as one measure to help address inequality, which has grown during the pandemic. An analysis from economists Emmanuel Saez and Gabriel Zucman found that Warren’s proposed tax could raise at least $3 trillion over the next 10 years; according to one study, it would have brought in $114 billion from billionaires alone in 2020.

A wealth tax is also a popular measure among voters, with a recent poll from Hill-HarrisX finding that the majority of respondents see a wealth tax as a way to address inequality.

“Instead of just complaining on TV, I invited Leon Cooperman to come to the Senate to make his case for why billionaires like him shouldn’t pay a wealth tax,” Warren said in a tweet after Cooperman declined her invitation. “We should have a public discussion on our rigged tax system. I’ll still use the hearing to do that.”

As for Cooperman? He may have declined the invitation, but “I will, however, be sure to tune in for the show.”

Read the original article on Business Insider

Sen. Elizabeth Warren wants to grill the billionaire who said the rich would hide their assets from a wealth tax

elizabeth warren
  • Sen. Elizabeth Warren has invited billionaire and wealth tax critic Leon Cooperman to testify at a hearing.
  • Cooperman has been an outspoken critic of Warren and her wealth tax proposals.
  • The hearing, which is for the Senate Finance subcommittee Warren chairs, will examine taxes.
  • See more stories on Insider’s business page.

Sen. Elizabeth Warren has extended an invitation to one of her most vocal critics to debate her marquee policy, the wealth tax, on Capitol Hill.

On Monday, Warren invited billionaire Leon Cooperman to testify at a hearing for the Senate Finance Committee’s Subcommittee on Fiscal Responsibility and Economic Growth, which Warren chairs, first reported by CNBC. The hearing’s topic: “Creating Opportunity Through a Fairer Tax System.”

It’s the latest in an ongoing debate between the two. In a March CNBC segment, Cooperman criticized Warren’s Ultra-Millionaire Tax Act, which would levy additional taxes on households with net worths $50 million and over. He has also criticized Warren’s wealth tax advocacy, and wrote her a five-page letter in 2019 in response to a tweet she sent asking him to “pitch in a bit more.” Warren even incorporated Cooperman into one of her presidential campaign videos about the need for a wealth tax.

Cooperman’s perspective: The rich would hide their assets from a wealth tax

In March, Cooperman told CNBC: “If the wealth tax passes, go out and buy yourself some gold because people are going to rush to find ways of hiding their wealth.” This remark was in reference to his previous assertion that people would utilize gold as an asset for hiding their wealth.

He said that a wealth tax is “foolish,” has “no merit,” and that there are other, better ways to raise revenue, with eliminating waste as the best option.

“I don’t think it’s intelligent. I don’t think it’s legal,” he told CNBC of the wealth tax at the time.

leon cooperman crying about taxes on cnbc

Implementation issues – and whether the wealthy would simply dodge a wealth tax – have emerged as the two most prominent criticisms of Warren’s plan. Treasury Secretary Janet Yellen has previously cited the difficulty of implementing such a tax, although the Biden administration hasn’t explicitly ruled it out. A recent study from IRS researchers and economists found that the top 1% of Americans fail to report about 21% of their income. Over $1 trillion a year in taxes may be going uncollected, according to IRS Commissioner Charles Rettig.

Warren’s perspective: A wealth tax could help address inequality, and raise trillions

Warren campaigned on a wealth tax in the 2020 presidential campaign, and has continued to advocate for it as one measure to help address growing inequality during the pandemic. Her Ultra-Millionaire Tax Act could raise at least $3 trillion in the next 10 years, according to an analysis from economists Emmanuel Saez and Gabriel Zucman.

If the wealth tax had been implemented in 2020, it would have raised $114 billion from billionaires, according to an analysis from Americans for Tax Fairness (ATF) and the Institute for Policy Studies (IPS). Over the last 13 months alone, American billionaires have added $1.62 trillion to their collective net worths, according to a report from ATF/IPS.

A wealth tax is also a popular measure among Americans: A recent poll from Hill-HarrisX found that over half of Americans see a wealth tax as a way to address inequality. Wealth taxes have also gained traction internationally, with the International Monetary Fund saying one-off measures could help support economic recovery.

Now, the two may discuss their views at a Congressional hearing

Warren invited Cooperman to testify on this legislation at the April 27 hearing; and she asked him to RSVP by April 22.

“This hearing is an opportunity to share your views on how to strengthen the nation’s tax system to address economic inequality, raise revenues to fund critical pro-growth investments in families and communities, and bolster our long-term fiscal and economic outlooks,” she wrote in her invitation, which was viewed by Insider.

In a statement to CNBC, Cooperman said that he was “trying to determine whether she’s being objective or whether she’s just trying to promote her own agenda.” He added: “I’m a bit suspicious given how she never responded to the letter I sent her before.” Cooperman did not immediately respond to Insider’s request for comment.

In her invitation, Warren said that, “as we move expeditiously toward consideration of changes to our rigged tax code so that the wealthy pay their fair share, I believe you should be afforded the chance to present your perspective directly to Congress.”

She added: “The opportunity will allow you to fully air your views, not merely in front of the financial news audience where you often express them, but before the entirety of the American people.”

Read the original article on Business Insider