LEON COOPERMAN: When You Buy Treasuries, Your Capital Is Being Confiscated

Leon Cooperman, founder of Omega Advisors, was on Bloomberg TV’s Inside Track this morning to talk about his latest outlook for investors.

His general consensus: Sell U.S. government bonds, buy stocks.

“I don’t think people understand how risky a U.S. bond is at 2 per cent return,” he said. “A 2 per cent government bond, with marginal taxes rates all in… you’re keeping 1.2 per cent when the range of inflation of is 2 to 3 per cent, so your capital is being confiscated.  It makes no sense.” Cooperman added that he doesn’t own a single U.S. treasury in his portfolio.

In addition to being bearish on Treasuries, Cooperman pushed for investing in stocks, pointing to the S&P’s growth this year as an indication of better times to come.

“You can find lots of cheap stocks out there that are yielding better than bonds today that are good companies that will grow… I think over time they’re the best house in the financial asset neighbourhood.”

Here’s part of the interview below:

 

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