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The Evolution of Leon Cooperman’s Investing Style

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The Evolution of Leon Cooperman's Investing StyleLeon Cooperman worked in asset management at Goldman Sachs & Co for 25 years prior to launching Omega Advisors in 1991. He attributes his luck of getting into Goldman Sachs to his MBA degree from Columbia University. He attended Columbia University’s business school along with Mario Gabelli, who is now the CEO of GAMCO Investors. There they studied security analysis under Roger Murray who co-authored the fifth edition of Security Analysis, by the great Benjamin Graham. The course of security analysis opened his eyes to the world of value investing.

The concept of long-term value investing appealed to him. He believes in holding long positions in companies with stocks which are mispriced. He shuns the idea of risks of momentum investing. His investment strategy has made him a manager of one of the largest hedge funds. Despite incurring high losses in 2008 due to the financial crisis, he still managed the beat the market by staying away from financial stocks. Since its inception, Cooperman’s hedge fund Omega Advisors, has returned an average of around 16%.

Keeping into perspective the prevalent market conditions, Cooperman prefers stocks over all other kinds of investment. He does not favor holding cash as the money realizes no return. When investing, Leon Cooperman does not necessarily limit himself to any specific industry or business, but carefully basis his investment decision on the management of the company.

Cooperman claims Teleydne as his first great investment all due to the company’s CEO Henry Singleton. Agreeing with Warren Buffett, Cooperman believes Singleton was one of the best managers in the history of modern American business. During the initial years of Teleydne, Singleton acquired about 130 companies using the company’s high share price. Owing to this strategy, during the period Singleton was able to drive his company sales and net income from zero to $1.3 billion and $58 million respectively. Additionally, when the share prices of Teleydne started to decline, Singleton started buying back company shares at low prices, later profiting in the long-run.

Leon Cooperman does not only agree with Warren Buffett regarding Henry Singleton’s capabilities as a manager, but Cooperman’s investment philosophy is much inspired by the investment guru. Leon Cooperman claims Warren Buffett as his hero like most in the investment world. Despite the similarity of Cooperman’s value investment philosophy to that of Warren Buffett’s, Cooperman believes he is more eclectic than Buffett. As mentioned before, Cooperman does not limit himself to any sector of the industry or any particular field of business, unlike Buffett who prefers holding a concentrated portfolio and investing in limited sectors of the economy that he is familiar with. What Buffett does is purchase undervalued stocks of good companies belonging to the sector of his preference or expertise, while Cooperman purchases stocks of companies belonging to any sector of the economy as long as the price and the management is right. Nevertheless, Cooperman admits Buffett is still far superior an investor than him.

Leon Cooperman will be speaking at the upcoming Value Investing Congress in NY, which will take place October 17th and 18th at the Marriott Marquis Hotel. I attended the last conference, and it was not only great for investment ideas, but one of the best networking venues for analysts, HNWIs, people in business development, financial media etc. I am going to be attending this year and covering the conference again.

Leon Cooperman’s speech will be one of the highlights of the next Value Investing Congress.

There is a special deal; Value Walk readers will receive a discount of $1,500 off the regular price, however it expires on September 13th so act quickly. As the conference gets closer the discounts decrease significantly. This will be the last significant discount for the conference.

Discount Code: N11VW8Just follow the link below and use the discount. Buy a holiday gift (or rather an investment that will likely yield rewards) for a loved one, friend neighbor or even yourself. But act soon before the huge discount expires: Value Investing CongressDiscount Code: N11VW8

The full line-up as of today is as follows:

Bill Ackman

Timothy Hartch

Bernard Horn

James Crichton

Adam Weiss

Michael Keller

Alexander Roepers

Joel Greenblatt

Whitney  Tilson

Glenn Tongue

Jim Chanos

Leon G. Cooperman

Michael Kao

Guy Gottfried

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