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Once Bullish, Leon Cooperman Grows Wary of Stock Valuations

Thursday, 25 Oct 2012 | 7:37 PM ET

For years famed investor Leon Cooperman has talked upstocks. But on The Kudlow Report, he sounded the alarm.

Cooperman, who is a widely followed investor and chairman of the hedge fund Omega, has made headlines for quite some time calling stocks 'the best house in the financial asset neighborhood.'

Back in 2011, Cooperman outlined his pro-stock market thesis at length on CNBC's Fast Money.

But on The Kudlow Report, Cooperman made a surprising statement that presumably reflected a shift in his outlook. He told Larry, "I think the stock market presently is fairly valued. I believe the profit cycle is peaking."

Cooperman went on to say that the market multiple may be too high.

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"Historically the market multiple is around 15," said Cooperman, but over the past 50 years or so the growth rate has been much more robust. If we're moving into a period of slower growth than the premium investors are willing to pay for stocks will probably decline.

Fast Money trader Guy Adami said exactly the same thing earlier in the week. Read More: Market Weakness Sign of Greater Trouble

hat's not to say Cooperman is a seller – he's not. "I'm not aggressively bullish or bearish," he explained, "I'm simply saying I think the market is now fairly valued."


And he reiterated something he's said many times before.

"If you must put money to work I still don't think there's a better alternative than common stocks – the Fed has made all the alternatives very unappealing."

Nonetheless, his commentary suggests his outlook is shifting.

Cooperman also told Larry Kudlow that he thought all the concerns about the fiscal cliff -or the confluence of tax hikes and spending cuts that could go into effect as soon as January 1st – are overblown.

"They'll kick the can down the road," he said. "There's no way a politician will allow the cliff to hit."



Tune in:

"The Kudlow Report" airs weeknights at 7 p.m. ET.

Questions? Comments, send your emails to: lkudlow@kudlow.com

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  • Lawrence Kudlow is a CNBC senior contributor. Previously, Kudlow was anchor of CNBC's prime-time program "The Kudlow Report"