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.

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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.
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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.”

Read the original article on Business Insider

Billionaire investor Bill Gross says the ‘Teslas of 2020’ may struggle in 2021 and reveals his top sector pick for the new year

FILE PHOTO: Billionaire investor Bill Gross listens during the Milken Institute Global Conference in Beverly Hills, California, U.S., May 3, 2017. REUTERS/Lucy Nicholson/File Photo
Billionaire investor Bill Gross listens during the Milken Institute Global Conference in Beverly Hills


Billionaire investor Bill Gross said 2020’s growth stocks “may struggle” in 2021 and revealed his favorite sector pick for the new year in his latest Investment Outlook letter. 

According to the PIMCO co-founder, stocks that soared in 2020, like Tesla and certain SPACs, won’t repeat the performance in 2021.

Tesla was up over 740% in 2020, with most Wall Street analysts predicting either a decline or only slight increase for the EV maker’s stock price in the next 12 months. Meanwhile, the top performing SPAC according to Nasdaq, QuantumScape, flew over 1,115% in 2020. 

For returns in 2021, Gross is eyeing natural gas pipeline stocks within the energy sector of the market. He said the market sector yields between 9% and 12% for investment grade stocks with certain tax advantages. Gross told inventors to “take a look” at Magellan Midstream Partners, BP Midstream Partners LP, and Enterprise Products Partners L.P.    

Read more:Buy these 30 stocks that handily beat the market in 2020 and are poised for the best global returns in 2021, RBC says

“TSLA? In the hands of the Robinhood gods I’m afraid it’s definitely overvalued,”he added. 

The billionaire investor also commented on what’s behind the sky-high asset prices in the market.

“This market is driven – yes – by intense speculation, but also by fiscally pumped, central bank-primed corporate earnings, which when discounted to present value by near zero nominal and in many cases negative real interest rates, produce record stock prices,” Gross said. 

Read the original article on Business Insider

Fundstrat’s Tom Lee says another epic rally in stocks hit hardest by COVID-19 could be coming soon

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  • Fundstrat’s Tom Lee said stocks in sectors hit hardest by the pandemic like travel and retail may be due for a rally. 
  • The head of research explained that the third wave of COVID-19 cases may be peaking in the US. When this happened after the second wave, epicenter stocks rallied shortly after, he said.
  • “From a market’s perspective, a rolling over of COVID-19 should be a “risk-on” signal for epicenter stocks,” said Lee. “The reason, naturally, is that epicenter stocks are more sensitive to lockdowns and benefit from economic re-opening.
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History shows that another rally for stocks hit hardest by the pandemic could be on the way. 

That’s according to Fundstrat’s Tom Lee, who wrote in a note to clients on Monday that “epicenter stocks,” or stocks in sectors like travel, retail, and services, could be poised to gain in the near future. 

The head of research explained that the third wave of COVID-19 cases may be peaking in the US. When this happened after the second wave, epicenter stocks rallied shortly after, he said. 

“From a market’s perspective, a rolling over of COVID-19 should be a “risk-on” signal for epicenter stocks,” said Lee. “The reason, naturally, is that epicenter stocks are more sensitive to lockdowns and benefit from economic re-opening. Hence, we should expect the epicenter stocks to rally.”

Read more:RBC unveils its 15 top biotech stock ideas for 2021 as the sector is poised to take off on the back of pandemic-related innovations and new funding

Lee said that the percentage of the US with declines in COVID-19 cases is at 62%. That’s the highest level since August. He also noted a recent comment from former FDA commissioner Dr. Scot Gottlieb, who said on Sunday that COVID-19 cases may be peaking nationally. This thinning out of cases could be a good sign for stocks that hinge on an economic reopening. 

Although this could be a temporary rollover of cases, and holiday gatherings could cause a spike in cases, Lee said COVID-19 is still rolling over earlier than he expected.  

Names in his basket of epicenter stocks include travel companies like MGM Resorts, Hilton Worldwide, Marriott, Norwegian Cruise Line, and Royal Caribbean, retailers including AutoNation, Harley-Davidson, Hasbro, L Brands, and Best Buy, and restaurants like Darden Restaurants and Starbucks.

Read the original article on Business Insider