Leon Cooperman Says He Likes Cash, Calls Trump's Deficit Cutting 'Contractionary'

Billionaire hedge fund manager Leon Cooperman says he’s taken a “conservative view” for his portfolio amid President Donald Trump‘s second term and a long-term high interest rate environment.

Cooperman appeared on CNBC on Monday to discuss the macroeconomic environment informing his pivot toward cash and stocks trading at lower valuations.

Cooperman, the chairman and CEO of Omega Advisors, says Trump’s focus on the deficit is the “right thing to do” but is concerning for markets.

“The president’s on the right track, but I think he’s doing things in a very destabilizing manner,” Cooperman said. “…he’s trying to change the whole ethos of the country… I understand what he’s doing, focusing on the deficit, but focusing on the deficit is contractionary.”

Cooperman has donated to Republican campaigns in the past according to FEC filings and criticized both Trump and his predecessor, President Joe Biden.

The Goldman Sachs alum says market valuation multiples are too high at 23 times earnings. For his portfolio, Cooperman is looking at stocks trading at a discount with high growth prospects, particularly Fidelis Insurance Holdings Ltd FIHL and Lithia Motors Inc LAD.

Vertiv Holdings Co VRT is among Cooperman’s top holdings, though he does not plan to sell at high current valuations due to tax considerations.

He holds around 15% of his portfolio in short-term cash and thinks that stocks are better protected than bonds to inflation risk.

“I have a very negative view of bonds — bonds don’t make any sense to me at 4.2% [yields],” Cooperman said. “Rates are going to head up in the long run.”

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