Leon Cooperman plans to inventory choose his solution to success, not anticipating rather more from total market

Leon Cooperman on CNBC’s “Halftime Report.”

Scott Mlyn | CNBC

Billionaire investor Leon Cooperman mentioned Tuesday that inventory selecting is vital to superior returns going ahead as the general market has grown stagnant after a historic rebound from the pandemic hit.

“When it comes to my long-term outlook, to be sincere with you, shares are the very best place to be, however I simply would not count on a lot from the main averages,” Cooperman mentioned at CNBC’s Monetary Advisor Summit. “I am ready to be in that form of surroundings the place I’ve to inventory choose my solution to success.”

The chairman of the Omega Household Workplace continues to be closely invested in shares and believes that the Federal Reserve’s view on inflation will present assist to the market. The S&P 500 has risen greater than 14% in 2021 and notched one other file excessive Tuesday.

“The cyclical forces that decide the market outlook are principally positively positioned and that is why I am closely invested,” Cooperman mentioned. “Now we have a central financial institution that desires extra inflation. Till that modifications, I believe the market might be in fine condition.”

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Regardless of the latest scorching inflation readings, the Fed is sticking with its view that any spike in value pressures will likely be momentary because the financial system bounces again from the recession. A key inflation indicator that the central financial institution makes use of to set coverage rose 3.4% in Could 12 months over 12 months, the quickest enhance because the early Nineteen Nineties.

Cooperman argued that corporations will be capable to defend their revenue margins by passing on inflation to customers by elevating costs.

“Everyone is anxious about inflation. Inflation is a optimistic for frequent shares as a result of inflation in corporations’ prices works its means into promoting costs, which raise the nominal degree of revenues and earnings. Inflation turns into an issue for the market when the central financial institution is shifting to curb inflation,” Cooperman mentioned.

The investor mentioned he is watching the greenback alternate charge very intently, together with alerts from the Fed and total financial efficiency to gauge if he needs to have one foot out the door.

When it comes to particular person shares, Cooperman revealed that considered one of his greatest holdings is fintech firm Fiserv, which he mentioned has a beautiful valuation. He mentioned he additionally owns Chinese language web corporations Baidu and Alibaba.