Leon Cooperman says we’ve reached the stage of the bull market that Warren Buffett warned about
For a long time, investor Leon Cooperman believes that we are in the late Innings of a bull market where bubbles, which is a stage of the cycle warned by Warren Buffett, can occur and risks can rise.
Omega Family Office President and CEO read a quote from CNBC’s “Money Tovers” on Wednesday from “Oracle” and fits properly what he has seen.
“When a bull market begins and which system follows, when you reach the point where everyone earns money, a crowded interest rates and profits are drawn to the game,” Buffett said in 1999. Fortune magazine article.
Buffett believes in the time when the bull markets usually not only when values are stretched, but also when there is irrelevant enthusiasm and the rally is fed with momentum.
“This is what is currently, Cooper Cooperman said, the mood of investors is very similar, and that valuing on artificial intelligence companies is” ridiculous “.
The S&P 500 has increased by about 40% since April and has returned to the highest levels of all time. The rally was ruled by the Mega-CAP technology giants, which invest in billions of artificial intelligence and whose potential of this period is rich.
The famous Buffett indicator – the ratio of total US stock market to GDP – one of the most open symptoms of market enthusiasm is flashing. In addition to the summits reached during the Dotcom balloon, the indicator is sitting well above the pandemic rally in 2021, which shows that the equity prices are far ahead of the basic economy. With 217 %, Buffett is beyond the level once “playing with fire”.
Cooperman thinks that stocks may be risky with late cycle crowded behavior, while he does not like government bonds even more due to high inflation. Bonds give fixed nominal interest, so higher inflation erodes real returns.
“Stocks are less risky than bonds at these levels,” he said.
