what’s unusual about the current cycle is you ought not have an $800 billion deficit in the fourth year of an economic expansion and interest rates ought not be zero. approximating zero. i’m trying to normalize. and what’s normal? to me, the market ought to sell somewhere between 15 to 16 times earnings, normal. and then earnings normalize at probably 100, maybe better. i really think it’s something between 1500 and 1650 on the s&p is fair value and that’s where we are. also, i think that the pace of — i’ve said this before on the program, but i think all of us have to take a message from 1.7% 10-year governments and zero short rates. well, here we are. profits this year are going to be up about 4%. the market’s already up 15. last year, profits were up 6 and the market was up i think 14 to 15. so, you know, i think that the market is somewhat ahead of the fundamentals. but by and large, the notion of a big decline, i just don’t think makes sense. guys? i’d love to ask him a question about new money coming into the market, mr. cooperman. so for instance — call me lee, call me lee. lee, pleasure. thanks for being here again because i love your insight. when you have investments which, you know, 20 billion, 30 billion you guys have in the markets, if you all a sudden got a new chunk of money, fresh money, right now, today, where would you put it in? i know what you’ve already got on your sheets. what would you buy today with new money? i would add to what i already have that i thought wastill undervalued. and we find no shortage of cheap stocks. i guess — this is small caps, i want to point this out. one recent edition to that portfolio was monetize. which is highly unusual for us. it’s about as small as we go. this is the mobile wallet. they have an application to put on mobile phones to enable you to do your banking. you want to pay your mortgage, move money, pay your bills. they’ve been blessed byvisa. visa, outright ownership and options. ability to own about 20% of the company. strong balance sheet. 175 million cash. no debt. any have 20 million people today that pay them $5 a year for the software on their iphone or mobile phone. that’s $100 million revenues. we think they’ll have 100 million subscribers within four years. is this a new position for you — this is the first time you’re talking about this company monetize — well, j bought something called technique, engineering and construction firm. have a quasimonopoly position in the l & g or off to a platform business. we think over the next three or four years will go 20% a year. l & g will be a growth business. we have a lot of things we think are cheap. aig, net life, citicorp and the financials. i guess, you have to understand what i do to answer your question. we’re value investors. it is first place we start. what is the s&p? if you bought the s&p what would you get? an index of companies growing 5% of year that yields about 2%, sells a bit over two times book value, has 35% debt in their capital structure. and for those statistics, you’re paying about 15 times earnings. we’re looking for companies who are growing in line or more than the market or yield more than the market or sell at a much wer asset value. you can find plenty of attractive ideas. the citicorp and the aig and the metlife, they’re all selling below book value. much was made of your position last year in apple. the fact that you’ve got out of it and you’re in qualcomm and facebook. are you tempted at these levels if you’re a value investor? is apple now a value stock? would you get back in at these levels? we did get back in the low 400s. but very small. i had a great trade actually. it wasn’t my idea but a friend of mine gave it to me. this is up your guy’s alley. but about two weeks ago, i bought a january 400 call. so the january 46 o call. and i sell the january 325 put, zero. nice. no cost. took out about $30 just two days ago. we love you for that — we didn’t do enough size unfortunately. that’s a theme we’ve seen from big investors out there. icon, obviously, mr. cooperman here, lee. real quickly, i’m curious, though, when we look at the portfolio of stocks that you’ve got right now, the one missing thing that — the one piece that seems to be missing versus what we’ve been hearing at least yesterday and through a lot of the seminar has been about the housing market. you don’t have a whole lot of exposure in housing itself or even some of the derivatives. we’ve missed the area to be perfectly blunt. and we have it through derivatives. we own solutions that helps the banks in foreclosing real estate. we own jpmorgan. we own citicorp. we have derivatives. we missed the lenars of the world and that was a miss. if i recall, it was a pick from brad berning on our show yesterday and i also heard that it was a pick out at — i don’t thing — i don’t know if it’s a love stock — well, three smart guys
