Head fund legend Leon Cooperman, Chairman & CEO at Omega Advisors, reveals where he is finding opportunity in the markets and why he doesn’t think turmoil in emerging markets is a significant factor for the outlook in the S&P.
yes, basically, i think corrections like this create adjective but they create opportunity. the correction is to be expected and is healthy. too many managers, investors were on the same side of the boat. you know, i look at an exhibit that bloomberg carries that lists out about 21 forecasts for the market by the various leading strategists. in 20 of the 21 had the market up in 2014. only one had it down, the average expectation was 1950 for the s&p. along comes this emerging market issue, creates a 3% correction, a lot of individual stocks down closer to 10%. if you look at the emerging market issue, while not insignificant, it’s not major. 75% of the world’s gdp is currently stable or expanding. the u.s. economic growth is accelerating a bit. europe is turning up. japan is expanding. china’s growing somewhere in the area of 6% or 7%. emerging market economies maybe account for 10% of s&p 500 earnings. if you throw in china, maybe it’s close to 15. it’s not an issue they could dramatically affect the big picture. i would say, you know, i look at it as a correction in an ongoing bull market. a lot of things to worry about. i worry about them. you mentioned one this morning, i’ve been very concerned for a long time about income inequality, equally concerned how the politicians might want to deal with that. as i look at the issues, i have to come down on the side that the market should have another positive return year in 2014, not nearly as much as the close to 30% last year but i think we could have an 8%, 10% type of gain for the year and that would give me the opportunity to find stocks that would do better than that.