Why billionaire investor Leon Cooperman says ‘there are three stock markets,’ as he warns of the danger in FAANG shares


These Estonian triples created history by competing in the Rio Olympics. Billionaire Leon Kupperman says that currently there are not just one, but actually three stock markets.

marko mumm / Agence France-Presse / Getty Images

Leon Cooperman, the 77-year-old billionaire chief executive of hedge fund Omega Advisors, has a lot of views on the stock market. Or, as he puts it, three stock markets.

The first market is what he will call the FAANG market – companies like Facebook FB,
+ 1.93%,
Amazon AMZN,
-0.91%,
Apple AAPL,
-0.75%,
Netflix nflx,
+ 0.57%
And Google Owner Alphabet GOOG,
+ 0.32%,
Technology heavyweight benefiting from COVID-19 interruptions. “Those stocks are, to an extent, better than gold. They are selling at very rich valuations, but if you look at the interest rates, they are not expensive, ”he said in an interview with RealVision. Cooperman stated that his biggest position is Alphabet, and he has a large position in Microsoft MSFT,
-1.04%,
A decent-sized position at Amazon, a small position at Facebook, and a quick moan were added that he exited Apple very quickly.

The problem with those stocks, he says, is whether the market had such runs as before, and usually has a higher failure rate. Compared to the Nifty 50 large-cap stocks of the 1970s, he said the 20% failure rate “would do a lot to make successful people sterile.” He also said that he would not be surprised if additional benefit tax was imposed on the beneficiaries of the coronovirus epidemic.

The second market is the one called Robinhood Market, referring to the zero-cost stock brokerage where young, retail investors play, bidding for bankrupt or struggling companies like Hertz HTZ.
-7.37%,
American Airlines AAL,
-3.99%
And Eastman Kodak Code,
-3.33%.
“Look, [billionaire investor] Karl Ikan is no fool. He is a wonderful boy. He has done a wonderful job in running his financial affairs. He sold his mistake in hertz [for] 72 cents per share. Three weeks later, the people of Robinhood take it for five rupees, ”said Cooperman. “I pay no attention to that market, it will end in tears, etc.”

The third market is “the rest of the market, and there’s a lot of value, and all you have to do is manage your risk.”

Cooperman was asked by RealVision Managing Editor Ed Harrison which of the three markets the Tesla TSLA is in,
-0.50%
Huh. “I’m not involved in Tesla, because I’m a corporate type of guy, and [Chief Executive] Elon [Musk]The behavior, he said, is clearly a genius of the boy, but his behavior is such that I am not comfortable with his tweets and this and the company’s market cap is beyond anything. Volkswagen VOW3,
-0.82%,
He said, the bus came with an electric car, as is the Porsche PAH3,
-0.55%
At the high end.

The buzz

The former US president’s debate was widely described as chaotic, with former Vice President Joe Biden calling President Donald Trump a racist.[Russian President Vladimir] Putin’s puppy, “as Trump said Biden can’t even say the phrase” law enforcement “without isolating his more radical supporters. Trump’s warning that the winner of the election could take months to negatively impact stock futures trading .

A CNN poll found that viewers thought Biden fared better by a 60% -28% margin – an almost identical view of the first 2016 presidential debate, in which viewers thought former Secretary of State Hillary Clinton called Trump Was defeated by 62%. 27% margin. Speaking of Clinton, National Intelligence Director John Ratcliffe on Tuesday refuted the Russian intelligence assessment, alleging that in 2016 Clinton tried to launch a scandal by tying Trump to Putin.

On the politics front, both House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows hoped that an incentive deal could happen this week, according to the Washington Post.

On the economy, both measures of the Chinese manufacturing purchasing managers index accelerated. The ADP reported its measurement of private sector payroll, and the Chicago PMI and pending home sales data are also due to be released.

PLTR of data analytics company Palantir Technology,

Direct listing is due to begin trading on Wednesday.

Walt Disney DIS,
-0.46%
It plans to lay off 28,000 workers in its theme park division.

Regeneron Regn,
+ 0.29%
Stated that its trial antiviral drug cocktail reduced coronovirus load and required time to reduce symptoms in non-hospitalized patients with COVID-19. Modern mRNA,
-0.04%
Late Tuesday said early-stage data suggest that the COVID-19 vaccine can produce antibodies comparable to older adults in younger adults and younger children in older adults.

Memory-chip maker Micron Technology MU,
+ 1.99%
Reporting better results than forecast, stating that it does not have a license that it wants to sell to Huawei Technologies of China.

General Motors GM,
-2.37%
Nikola, the embossed electric-truck manufacturer, will not complete its deal with NKLA,
-7.35%
On Wednesday as reported by CNBC. There is a risk that the deal could collapse altogether, triggered by a short-seller allegations against Nicola and subsequent federal government investigations.

market

US stock futures were pointing to unhappy contract YM00 at the end of September,
-0.67%
159 points below. S&P 500 SPX, down about 5% this month
-0.48%
Still up 8% in this quarter, and 29% growth in the last two quarters is the best six-month period since 2009.

Gold futures GCZ20,
-0.66%
Fell below $ 1900 an ounce. Oil futures CL.1,
-0.53%
Were also weak.

Chart

The market’s biggest concern relates to the Biden Presidency, their promise to raise corporate tax rates from 21% to currently 28%. Historically, corporate stock rates have not been specifically correlated with stock market performance, says Invesco analysts Paul Jackson and Andrus Wigg. “Overall, it appears that there are larger impacts on the stock market than the corporation tax rate. This is not surprising, given the broad implication of tax changes, including the impact on government financing requirements, ”he says.

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