As the election approaches, famed investor Leon Cooperman of Omega Advisors, explains why he’s supporting Mitt Romney and how he expects to see the “fiscal cliff” play out as the deadline nears.

Leon Cooperman

Video and computer generated transcript below:

but first up tonight, with elections 12 days away, then the lame duck congress, including the fiscal cliff, we call on leon cooperman, chairman and ceo of omega advisers, one of the 40 businessmen behind the open letter, a critical choice for america advertisement that ran earlier this week in USA today.lee, thank you for coming on. i appreciate it very much. i have to ask you, you’ve had a fabulously successful career. this has to be a tricky moment. you have an election in 12 days. you have an unsteady market with earnings dropping and so forth and so on. what is your advice to investors? how do we get through this between now and year end? thank you, by the way, for having me on the show. i think the stock market presently is in a zone of fair valuation. so i wouldn’t call myself aggressively bullish or bearish. we have been quite optimistic for the last three years. but the rise in the market from the lows of ’09 has put the market now in a zone of fair value. having said that, to your viewers i would say that i don’t think there’s a better alternative amongst financial assets than common stocks because i think the federal reserve has created an environment where when you look at the alternatives, they’re very unappealing. you can keep your money in cash because you’re negative and you’ll earn zero. keep your money in u.s. government bonds which yield about 1.7 or 1.8%, adjust it for inflation and taxes, and that instrument doesn’t long at 1.7%and 1.8%. so you’re not a big seller? you know the issues as well as anybody else. you have a sluggish economy, housing may be doing a little bit better, but business is not investing right now. you have earnings way below what people expected. you have revenues way below. the stock market in the throes of a 3% correction. even before we get to the election-year politics and shenanigans, just right now, how long do you think this earnings correction in stocks will go on? well, i think the main reason why we have moved into a zone of neutrality in our investment view is because we think the profit cycle is peaking.having said that, basically the stock market is still relatively undemanding in its valuation. i don’t want to sound like as a statician. to some extent, all of us in the stocks business has to be. but the p/e averaged about 15 for the s&p. in that same period, the u.s. government is 1.8% and the multiple in the market is about 14 or a little bit less. so we’re below the historical multiple at a time when interest rates are almost a quarter of their historical average. so the market is relatively undemanding in its valuation. that’s the result of people de-risking and being very much mindful of what happened to them in 2008 and also some of the uncertainties you talked about,the election, et cetera. let’s go to those uncertainties. you’ve written an open letter to president obama. you expressed your criticism of him. you call it divisive class warfare aimed at the successful people in business. you signed the letter today. lee, let me ask you first, if Barack Obama is re-elected, how does that impact your investment thinking? well, i would think it would be a negative because basically it would affirmation of his policies. i respect him and the office of the presidency. but every bone in my body tells me we need a change in leadership. i wanted the president to do well when he was elected because if he did, the country would do well. he’s not improved on the situation and in my opinion, has made it more difficult. there’s a lot of suffering out there. and i’m sympathetic to that suffering. i’m not a fat cat basically on the republican ticket. i’m basically pro choice, pro gay rights, i’m for aggressive income tax structure, i’m a strong believer in the safety net for the disadvantaged. i think the carried interest for hedge funds and private equity is ridiculous, it should be eliminated. and i think Mitt romney should not have had a tax rate of 14%. but it was legal. and i would only point out that the president controlled congress and the executive branch of the government for two years. if he didn’t like the tax structure, he could have changed it. and i’ve taken the giving pledge with warren buffett and bill gates. i’m going to cycle back what i’ve made in 45 years. you accused the president specifically in this note of too much debt, overspending and over-regulation. so i guess in view of your points — i appreciate your other aspects on social policy and so forth. but just on the hard economic and investment strategy points, lee, if the president is reelected, is that a sell signal for investors, in your judgment? i don’t think the stock market at the present value is discounting either a Mitt romney victory or an Barack obama victory. i think the stock market is kind of, like i said, in a zone of neutrality. the country will do okay either way. i heard warren buffett this morning on cnbc and he said he thought the economy would move ahead under either president. but i think it’s a question of leadership, one is more confident in the policies to be pursued. i think mitt romney has been accomplished in everything he’s tackled in his life. and i think he has the capacity to bring the country together, to bring the various self-interest groups together to move us down the road. and the president has unfortunately been unable to do that. and i don’t think we want to give him another four years tomove us in the wrong direction. what made this country great was everyone had the ability to achieve. right. and now we’re going down a path where everybody has the ability to receive.and i think that’s the wrong path for the country. we all have aspirational. we believe in exceptionalism. i want to give everybody an opportunity to achieve but i think — it’s the old line, it’s worked over by believing it. if you give a man a fish, you fed him for a day. if you give that person — teach him how to fish.right, you’ve fed him for a lifetime. i love that, lee. i always have.let me ask you this, there’s another hurdle. if romney wins, you still have a lame duck congress and you have the prospects of whatever, $400 billion, maybe $500 billion tax hike. that would weigh heavily on the economy. how do you get around that  investor? because basically there is no way that they will let the cliff hit. everyone’s worried about it because the last round of debilitating discussions that sent the market down dramatically. i believe at the end of the day, these people in washington are not that irrational, are not that foolish. they won’t put the country through that kind of problem. i think the cliff will go to something closer to $150 billion. it will be a drag on theeconomy. but it will be kicked down the road and we have to start dealing with the problems and i’m pro- Mitt Romney because i think he’s more likely to bring together the various factions tofashion a — he’ll go across the aisle. he’ll walk across the aisle.he said that in the debates. i think that’s been a big reason why his polls have gone up. lee cooperman, if kudlow gives you a romney reelection, a much milder fiscal cliff and some kind of ipartisan debt deal next year, if i give you all that because of my respect and affection for you, how high can the dow jones go in the next couple of years? first, i would thank you for that gift, a wonderful gift. i will prosper even more. i would say 1,555 minute s&p. make no mistake about it, no matter what is elected, we have wood to

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