‘The market is ahead of the fundamentals’: Billionaire investor Leon Cooperman says stocks are overvalued, especially considering the huge increase in debt

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  • Billionaire investor Leon Cooperman told CNN in a Monday interview that the stock market is overvalued, and that he’s worried about the huge increase in national debt.
  • “The China relationship deteriorating, the tremendous increase in debt in the system, certainly from the election, the virus issues,” are risks that could all weigh on markets, according to Cooperman.
  • In particular, he’s worried about the federal deficit growing faster than the US economy. That could mean “more of our nation’s income will have to be devoted to debt service, which will retard economic growth in the long term,” he said.
  • Read more on Business Insider.

Billionaire investor Leon Cooperman thinks that the stock market is overvalued, as investors are overlooking a number of key risks including growing national debt, he told CNN in a Monday interview.

“On the big picture, I think the market is ahead of the fundamentals,” said Cooperman “I believe in the economic recovery, and I believe we’ll get ahead of the virus problem, but I think the valuations are just too high relative to the uncertainty.”

US stocks have rebounded strongly since the coronavirus pandemic meltdown that sent it to recent lows in March, and are now nearing all-time highs even as the crisis continues. Still, Cooperman sees investors overlooking a number of risks.

“The China relationship deteriorating, the tremendous increase in debt in the system, certainly from the election, the virus issues,” are all risks that could weigh on markets, according to Cooperman.


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He’s particularly worried about the national debt, which has surged as the government attempts to rescue the US economy from the shock of the coronavirus pandemic.

“I am focused on something the market is not focusing on at the present time and that is: Who pays for the party when the party is over?” said Cooperman.

In addition, he worries that the the federal deficit is growing much faster than the US economy, which means “more of our nation’s income will have to be devoted to debt service, which will retard economic growth in the long term.”

Cooperman, who last year publicly fought with then-presidential candidate Elizabeth Warren over her proposed wealth tax, also worries about a Democratic sweep in the November election.

“If Democrats control Congress and the White House, I think that there’s going to be a big increase in taxation which will not be a positive for the market,” he said. He added that President Donald Trump is “worse than I feared in many respects.”