Leon Cooperman: S&P 1200, Bullish on Energy, Healthcare & Financials

Today, Leon Cooperman, another famed investor and chief executive officer of Omega Advisors, briefly discussed his market views on CNBC.  The following are the more important points from his discussion:

(1)  Cooperman is “moderately optimistic” with regards to the market and believes that it will climb as high as 1200 sometime this year.  The sectors he is currently investing in are Energy, Health Care and the Financials.  Meanwhile, he is staying away from consumer discretionary, utilities and Treasury bonds.  Once the easy money at the Fed ends, the economy could experience several years of rising interest rates, which would hurt those  currently investing in Treasury bonds.

(2) Last year, Cooperman had nearly a 25% position in high-yield debt and plans to sit on this position for the time being.  He states that usually he would start reducing the position, but the Fed has created an environment where the alternative investment in credit balances is yielding a near 0% return, while high-yield is returning between 8% to 9%.  In the Daily DL for 1-11-10, the current boom in the high-yield market was discussed in more detail, for those interested.

(3)  Furthermore, Cooperman believes that the Fed will continue to be accommodating regarding its monetary policy until unemployment dips below 9%, which he expects will be during the second or third quarter of 2010.  The Fed’s current policies have resulted in an environment that is very much pro-speculation.  When people are earning near 0% returns on their savings, they are forced to put their money to work further down the risk curve.

Tagged with Consumer Discretionary, Cooperman, Energy, Fed, Federal Reserve, High Yield, High Yield Bond, Leon Cooperman, Omega Adivsors, Treasury Bonds, Utilities