Billionaire investor Leon Cooperman told CNBC on Wednesday that he believes the stock market will struggle to generate significant returns in the coming years, following its solid recovery from pandemic-era lows in the past ten months.
“I think the short-term outlook is likely to be good. In the long run, I think we’re indebted to the future,” Cooperman told Squawk Box.
“Whenever you bought on the market when it was sold at the current multiple of, say, 22 times or more, you’ve never made any serious money a year, three years, five years. I think that’s what we’re looking at,” he added. the president of the Omega Family Office.
The Federal Reserve’s accommodative monetary policy, along with an aggressive fiscal stimulus provided by Congress in response to the pandemic, only “pours more fuel into the fire” on Wall Street, Cooperman said.
“Today there’s a significant chunk of the market that’s in euphoria. You see 50% of prices. You see a SPAC per minute. That’s what rings the bell,” Cooperman said.
While examining the market, Cooperman said his approach is to “seek value.” He added: “I have long-term concerns because I think the policies we are implementing are unsustainable.”
“We have that momentum. We have the push for very, very simulated fiscal and monetary policies. It’s hard to fight right now,” Cooperman said, just hours before Democratic President-elect Joe Biden takes the oath of office.
“Then we have the attraction of a new administration” that is likely to pursue policies such as higher corporate taxes and more regulation, he said, adding that he believes such policies could hurt the stock market. “It’s a less business-friendly and less friendly business environment,” he predicted.
Cooperman, a frequent critic of Progressive Democrats and outgoing President Donald Trump, said he voted for Biden in November, even though he was “against my own economic interests.” Instead, he said he voted “my values and my values were not of President Trump.”