market folly

Omega Advisors founder Lee Cooperman recently appeared on Bloomberg TV and outlined seven reasons for market upside.  Here's his rationale:

1. This would be the first market peak that occurred without one Fed tightening.  He says on average, the market went up for 2.5 years after the first rate hike.

2. Bear markets come due to recession, overvaluation, hostile Fed, or a geopolitical event.  Those don't really seem to be present, with the caveat of the last one.

3. Markets usually peak during euphoria and he doesn't see any signs of that.

4. The stock market has already corrected recently.

5. What's the alternative to stocks... bonds yielding 2% or cash earning zero?

6. There's enormous substitution taking place of debt for equity.  Corporations are announcing big buybacks and that supports the market.

7. Valuation is reasonable

Embedded below is the video of Cooperman's Bloomberg appearance:



You can view recent portfolio activity from Cooperman here.