Closing Bell - Closing Bell Overtime: Exclusive with Leon Cooperman 5/10/22

Episode Date: May 10, 2022

Legendary investor Leon Cooperman from Omega Family Office joins Scott Wapner in an exclusive interview. Cooperman explains why he doesn’t see evidence of a market bottom yet. He also says the high is already in for 2022.

Welcome, everybody, to Overtime. I'm Scott Wapney. You just heard the bells. We're just getting started right here at Post 9 at the New York Stock Exchange. And in just a few moments, I'll speak exclusively to legendary investor Leon Cooperman on the state of stocks and whether a bottom is, in fact, getting closer. We begin, though, with our talk of the tape. And it is all about these markets and the search for something, anything positive to build on. Did we do it today? We didn't go down a lot. Maybe that's a plus. Let's ask BMO's Brian Belsky.

He does have the highest S&P target on Wall Street. He's here with me on set at the New York Stock Exchange. Welcome. It's good to see you in person. Amazing to be here. It's remarkable to me that you haven't cut your target. I mean, straight up remarkable. Why? I mean, you either have incredible intestinal fortitude,

you're the most stubborn person on earth, or there's another reason. What is it? I'm not stubborn. I have faith. I heard earlier today that faith is not an investment strategy. But I'm bullish, I believe, in our companies here in the U.S. I also think, too, you know, I've been doing this for a long time, and one of my pet peeves were stock would go down and then the analysts would drop the target.

Market's gone down, I'm not going to drop my target. We're going to want to see how this thing settles out. And I think tomorrow is a very important day. And remember, this market... Because of CPI? Yeah, because of CPI. But this market has been so binary for the last three years. Good news, bad news.

COVID, no COVID. Stimulus, no stimulus. And the Fed has clearly taken away the bucket for the punch bowl. We know that, right? And we've had a re-rating of the growth stocks that kept this country, this society alive. We know that. Now, what are we going to pay for these going forward? That's going to be a big question, right?

I think our earnings number on the S&P 500 at 245, I think it's spot on. I think it's spot on. Now, how much are you going to pay for that. And now we're going into the year where we made the mistake. And I'm not ashamed of saying we make mistakes is that we were using the transitory term. I thought that inflation would go off a lot faster up like an elevator down like an elevator. It's much stickier than I thought. And I think tomorrow we are seeing signs of on a month over month basis that inflation is peaking. We get that. But are we going to see some sort of a surprise number?

Right. And that could really get things going. What makes you think that your $245 earnings number is dead on, right on the money, as you suggest, so unbelievably confidently? I mean, the whole knock is that earnings expectations, while still high, are delusional and that they need to come down. Why do you say they don't? You know, there's this notion that analysts are always wrong and they're always late. But I think what people have missed, and this has been going on for 20 years, that the standard deviation of earnings in the United States in terms of the S&P 500, but especially tech, has become very tight.

The number is actually pretty good, and the cash number is pretty good. So if you think about where free cash flow yields are, where balance sheets are, where debt to equity is, all of that kind of comes into how you run your company. In the operating performance of the majority of sectors in the S&P 500 continues to improve. We feel good about the earnings number. Do you think we're near a bottom? Well, judging by a number of sentiment issues that are personal, meaning the Brian Belsky Stomach Index over the last 10 days, I mean, it's never been worse.

So in the amount of negative calls that I'm getting, I haven't got any death threats yet, not like 2008. But I will tell you this, that investors are nervous. They are positioned for more downside. And of the people that we talked to since five o'clock this morning, no one is positioned for an upside surprise. No one. Well, because there's one thing to say that inflation has peaked. It's another to suggest that it's actually coming down. Right. So, yes. OK, are we going to get 8.1 read on the CPI relative to 8.5 or what it was? Sure. It's going to feel better. But inflation is still high. Right. And the Fed is going to fight it at all costs. Are you suggesting in any way that the Fed is not going to be as hawkish as the market now suggests? The market, in some respects,

is ahead of the Fed in terms of what the ballpark looks like moving forward. The stock market, absolutely. And the bond market to some degree, but the Fed has to raise rates. They absolutely positively have to raise rates. And I think there's not enough talk about the bond market, Scott, in terms of a 40-year bull market in bonds. If you think about what happened since the late 80s for the whole decade of the 90s and 2000s, average inflation was 2.6%. 2.6%. And the average forecast at the end of 2021 for 2022 was 3% inflation. Everyone got it wrong.

So does everybody have it wrong this time around that we're too high? That's what I kind of worry about. Needless to say, we're going to have to work off this inflation for a while and the Fed's going to do its job and be probably more aggressive than everybody thinks. If you're so bullish, as you suggest, would you be buying technology, for example, which, you know, and I don't want to make too much of this because it was positioned as a trade of David Tepper telling Jim Cramer that he covered his NASDAQ short, and maybe he thinks the selling is going to be ending there for the time being,

and it's a trade, not a longer-term view. Is technology, Apple, which has lost $220 billion in market cap in three days, is that a buy here? Is Microsoft, which has lost $190 billion in three days, a buy? Or Amazon, $173 billion, a buy, or Tesla, near $200 billion a buy. Are any of those buys right here? Of those, we would say three out of the four. The one that we're not owners of in the portfolios that we manage for BMO is Tesla. I've never owned it, probably never will, just because of the momentum and the valuation of that stock, Scott.

I like the bits and pieces of Tesla, like Freeport Macaron or NVIDIA because of the chip side of things. There's the wreck right there. We're looking at it on the screen right now. I mean, it's stunning what's happened to, and we're not just talking about the high-flying, high-valuation-in-the-clouds kinds of stocks. Pardon the pun for some of those,

but these names, the mega caps, where all the money has gone. So the issue on Apple is, do you want Apple part of your portfolio now versus the next three to five years? And I think it's both. Are you going to pay 25 times for that while the market wants to be at 17 or 18 times? Your entire portfolio is not going to be 25 times earnings. You need to balance that off with some lower multiple names. And I think you can find those in certain areas. But I think you want to be an owner of Apple, Microsoft, and Amazon right now because they are the big brands and the big

secular growers that are going to have the fortitude that will lead us on the way out of here. All right. So we have Lee Cooperman coming up in just a bit. I want to remind all of you of that. And I'm going to bring in Joe Terranova and Bryn Talkington in just a second. I've got one more for you. Yep. Because another thing I hear is, oh, the consumer's great. The consumer is strong. Consumer spending is such a big part of the economy. I look at a stock like Upstart today, right, one of these AI fintech lending stocks, and I'm like, all right, that stock's down 50%.

And I wonder if that's the canary in a coal mine. Because the consumer can change its behavior, right, in an instant. Inflation is high. It's not going down anytime soon. Is it peaking? Will that make them feel better? I don't know. Maybe it will. Maybe it won't. Outside of the spending on the summer vacation, we know the travel economy is strong. Do you worry at all that the consumer is going to deteriorate and that is going to be the tipping point to make you worry? I think the consumer has done an amazing job through COVID in terms of how they were concentrating their buying in a few areas. I think now they're going to use the same strategy, Scott, in terms of the money that they're spending.

And you mentioned it. We're going to go to Marriott. We're going to jump on Delta Airlines. We're going to get out there and live again. So this demand destruction that everybody talks about that they think the Fed is doing, it's not going to get out there and live again. So this demand destruction that everybody talks about that they think the Fed is doing, it's not going to hurt the consumer. What happens after they get on the airplane and they go to the hotel and they spend the money in the restaurants, right? Yes, it's pent up demand. People want to get out and live. But once they

spend the money on that, you don't think they'll freeze up after that and then start to cut back? Well, I think the key thing is going to be what happens into the fall and into the winter because I think summer is one of these periods right now where we're transitioning into the services side of things and the leisure side of things. I think it's very, very important because we didn't do that for so long. We spent all of our money on technology or at-home type of stuff or Costco or Home Depot. And I think at this point, we're going to continue to be very concentrated in how we spend our money, but I would never, ever, ever bet against the U.S. consumer. All right. I'm looking at

roadblocks on your screen. I know all of you are as well. Looks like it reports a slightly bigger loss than anticipated. The stock actually is up in the overtime by about 5%. We'll have more color on that coming up, too. Let's bring in now Joe Terranova from Virtus Investment Partners and Bryn Talkington from Requisite Capital Management. It's great to see you both as well. Bryn, are we at the bottom? Are we near the bottom? What do you think? I think the NASDAQ is getting close. You know, we talked yesterday about how many stocks are above the 200-day moving average.

For the NASDAQ this morning, that hit 16%, meaning only 16% of the stocks in the NASDAQ are above their 200-day moving average. That was a really good marker going back really to 2008, 2009. And so ultimately, the selling will wear out. And so I think the Nasdaq's getting close the S&P on Friday You had 30% of stocks were above only 30 or above their tuner today after yesterday Scott It's in the low 20s And so I think you're really starting to get a washout of people selling for sellers margin calls And so I definitely think from those two metrics, which I think are really strong, markets are looking much closer to having a bottom. How long it lasts, I'm not sure, but definitely that 16% is a really good number for the Nasdaq.

I'll get to Joe Terranova in just a second. I'm looking at Roblox, though, as all of you are, too. Steve Kovach has more color on it. I mean, one of many technology stocks and sort of, those stay-at-home names that have gotten cut, I mean, more than in half, like 75% of the value. This was a stock that was 141 in the 52-week range. Here you go, it's in the 20s. So what do we know? Yeah, that's right, Scott. It's a miss, a loss of 27 cents a share versus 21 expected and a miss on revenues. Again, like you said, 631 million versus 645. Let's talk about users because that's the thing that's really been driving the stock down lately. Average daily active users, 54.1 million. That's up 28 percent, but still a miss of 55 million expected.

And that 28 percent growth might sound good, but compared to the growth they saw a year ago, 79 percent peak pandemic. You know, we can see that growth slowing. I caught up with Roblox's chief business officer, Craig Donato, and he was saying, look, the good news here is that we are growing and keeping our users. But the bad news is they're spending less time in the app as COVID lockdowns keep going. So he's really happy with how they're doing and retaining these users. It's just a matter of monetizing them better now that they're captured into the system. Scott.

I got you. I appreciate that. Steve Kovac, thank you there. Bryn, quickly to you. You own RBLX, yeah? Yep, I own it. I own it in the 70s. And obviously it's been painful.

I think it closed at what, $20, $23? And so I think this is a textbook textbook the stock can only go so low it's been really disappointing i'm very not i'm not surprised but i think dave's bazooki is a great ceo and we'll have to see if this company can grow into earnings because clearly they have no earnings they have a lot of revenue they have cash flow but they're reinvesting in the business and this is just not a company that hedge funds and individuals are going to rush into right now. People are going to rush into energy or high dividend yielding stocks where they can see that strong earnings growth today. So I know why it's

down. I'm not selling it. It's disappointing that it's in the 20s, but I'm going to hold on to it for the next few quarters. Okay. Let's circle to you, Joe. Give me your first word here because you're going to be back with us on set a little bit later as well. But leave us with a thought here on what we should think about and the way you're thinking about the market. I posed at the very top. We're looking for anything. Give me some sign that we're close to a bottom. Maybe today, in the mere fact that we didn't go down a lot, is something to hang your hat on? And there were some, you know, maybe some superficial things to look at, too. What do you think? I think that in the near term, you have to remember that you're exiting the blackout window and companies like Apple, Microsoft and Alphabet, they're going

to take action here. They're going to be buyers of their stock, especially when they've seen significant declines here over the last five days. So I think that's going to buffer any further downside attempts overall for the S&P 500 index and even the Nasdaq itself. I think investors need to keep that in mind. So you might be positioned here as we move forward in the coming days for what I would call a little bit of a buyback bounce. These high-flying tech stocks, are they coming back ever? You know which ones I'm talking about. Of course I do. I think we're in the penalty box for several years. It could be six years. Several years, okay. Yeah, so you know this kind of happened after second corner earnings in 2002. I'll never forget it. John

Chambers, the CEO of Cisco, and he comes out on CNBC, said I don't know what our growth rate is. And it killed the high-flying tech stocks literally until 2008, late in 2005. So I think there's some time that is going to be needed to rebuild income statements and products and management prowess and all of this. It's going to take years, Scott. I really do. It's an interesting point that Brian raises, Joe, the issue of time, which we've discussed a lot in thinking about the duration and the pain of a pullback, the likes of which we're suffering through now. It's not just a price correction that you have to go through. And in some cases a much more severe correction that becomes bear market,

which in much respects we're in now, it's a time thing too. And we haven't necessarily spent enough time, so to speak. Explain that to viewers and why you keep talking about that. Well, I think what you're doing is you're asking an impatient investor base that only knows V-shaped recoveries to actually be patient. There are places where a bear market is fully evident within the market. And I agree with Brian. There's an L-shaped recovery where it'll take many years, four years for that to come back. Think about the bear market of 73, 2000 and 2007 took four years in each of those incidents.

So generally a correction of about 20% takes about four to six months in the decline. And then the recapture period subsequent to that is another four to six months. So I think investors need to be patient here and identify which are the equities, which are the asset classes that will experience a V-shaped recovery once the recapture period unfolds, because it's not going to be universal. It's not going to be what we've experienced the last several years where all boats rise. All right. Joe, as I said, I'm going to see you a little bit later on. That's Joe Ternova. He'll be back on set with me in just a bit. Bryn Talkington, thank you so much for being with us. I'll see you again soon. Brian Belsky, my thanks

to you, too. It's good to have you here right next to me at Post 9. We'll see you soon. Thank you so much. That's BMO's Brian Belsky there. Let's get to our Twitter question of the day now. We want to know which fintech stocks are most attractive after their big pullbacks. SoFi had a pullback today. Is it that one? What about PayPal? That's really been in the crosshairs lately. A firm that so-called buy now, pay later company and then upstart. Really a big downdraft. That stock got cut in half today. An AI lending firm. So really this new variety of financial-related companies,

that's where we want your head to wrap around right now. You can go over to CNBC Overtime on Twitter, cast your vote. We'll bring you the results at the end of our show today. Coming up, our exclusive interview with billionaire investor Leon Cooperman. We'll get his take on the recent market volatility, find out where he is finding opportunity right now, if anywhere. We'll do that after the break. Take a look at shares of Unity Software, by the way.

They are sinking in the OT after issuing very weak Q2 and full year revenue guidance. The stock is down by 33%. Don't give bad guidance in this market. We're back after this. Welcome back to Overtime. Coinbase earnings are out right now. Kate Rooney has that for us. Hi, Kate.

Hey there, Scott. It looks like a beat here, or excuse me, a miss here for revenue in the first quarter for Coinbase and a drop here in monthly transacting users as well. The EPS number, we don't have a comparable number for that yet, but this was a loss, $1.98. That's a negative number. The Wall Street estimate, again, we don't have a comparable one, but Wall Street was expecting a gain here, a positive number. So again, a loss of $1.98 on EPS. Revenue of $1.17 billion. That was lower than expected. On guidance, Coinbase lays out three different scenarios here based on market conditions. So again, don't quite have a comparable number.

But I want to point you to monthly transacting users. That came in at $9.2 million, down 19% quarter over quarter. It looks like the stock here is down more than 10% after hours. They talk about some of the lower crypto asset prices and volatility beginning in late 2021. They say market conditions directly impacted those Q1 results. Again, this business very tightly correlated to Bitcoin prices and to trading activity. Scott, back to you. OK, I appreciate it, Kate Rooney. Thank you. But we do have Bryn Talkington, by the way, still with us. We kept her here because she owns coin. Also, what's your quick take here? Yeah, I want to listen to the call for sure with Brian. We were actually, if you look at the JP Morgan report, I think they were expecting an 84 cent loss for the year. So about 27 cents this

quarter. So losing $1.98 is clearly above expectations. Coinbase right now is going to live or die by the price of crypto, which has come down dramatically. I will say on top of that, what's been going on with the UST stablecoin that really had a run on the bank, you know, that's also going to weigh on it. But after the call, we'll see what he says. You know, I'm once again going to hold through. This is a long term investment. But at the at the onset of it, Scott, the 198 is a really big miss versus what analysts were expecting. Yeah. All right. I appreciate it, Bryn. Thank you very much for sticking around covering Coinbase for us, too. Important to get your point of view there.

It was a little more than a month ago when our next guest told us he was growing more concerned about stocks and had reduced his own exposure considerably. So what does Leon Cooperman think now? Mr. Cooperman is the Omega Family Office chairman and CEO. He's back with us today in a CNBC exclusive. Lee, welcome back. It's nice to see you again. Nice to be with you, I think. I like, yeah, I don't know. We'll find out. I like the backdrop. Look, last time you were with us, Lee, the S&P was close to 4,500. You said that you think fair value seemed to be around 4,050.

We're at 4,000 now. So what does that say about your perspective on the markets from here? Let me say you've asked previous guests repeatedly to spot the bottom, how we're at bottom. Let me give you the best evidence of a bottom when it appears, and it does not appear currently. The best evidence of a bottom is a company comes out with disappointing earnings, the stock opens up down,

and closes the day unchanged up. We're not seeing that at all, at all. So I would say the stock market has not yet discounted the economic slowdown that we're experiencing, in my opinion. One, unfortunately, I owned of Boston Loan today. Even though it was down quite dramatically already, it missed the numbers and the stock got cremated again.

So I don't see the conditions that would be suggestive of a bottom. I think we could have a short-term bounce at any time. I don't think coming on now and being negative is placing any new ground. But I want to go back to what I said to you a month and a half ago. I said to you, I felt a little bit like the Pharaoh who had a dream. And this was covered in the Bible. And the Pharaoh's dream was interpreted by Joseph. And the dream was that the seven fat years would be followed by seven lean years. Now, my theme has been that we've had the most inappropriate fiscal combination of fiscal monetary policies in our history. OK, we have pulled demand forward.

Unless we're heading to a fiat currency, I think that we're going to have to deal with these problems. Interest rates are very low, too low relative to inflation. And our fiscal policy is out of control. We basically have had we had 20 trillion dollars of federal debt in 2017. And four years later, we have 30 trillion dollars of debt. That's a growth rate in debt far in excess of the growth rate of the economy. So I would say we've got to pay a price for this pulling demand forward. And I have a conservative view. I think either the Fed or the Fed or oil prices will ultimately

push us into a recession. I do not expect a recession this year. So therefore, I don't think the market's going to get cremated from here. But I think the ultimate low is lower next year. I think if I had to call a shot, I'd say I think 4,800 to high for the year is in. I would avoid bonds. And I would buy only selectively. And I would buy within my power space. I'm a low multiple asset value oriented investor. I do own some of the technology stocks. There's nothing expensive

if interest rates remain at these levels. The point I've been making for three or four years, if interest rates belong at these rates, then basically the returns in the stock market can be very modest. You know, there's a capital market line. Your return on fixed income has bearing for your return in equities. And if your returns on fixed income are going to be as low as 3% or lower, then your stock market returns are going to be lower than people used to. If 4,800 is the high for the year that's in, and you don't think we're at the bottom now, I mean, how much lower do you feel like we need to go

before you're confident enough to say, you know, if not the bottom, I feel like we're close enough that you wouldn't be as cautious as you clearly are. Well, I would say this, that, look, stocks are heterogeneous, bonds are homogeneous. Bonds of the same quality rank move within a quarter point of each other. The stock market is heterogeneous. There are some stocks already at their bottom. There are some stocks that have a lot more downside. So I try to traffic where I think the risk-reward ratio is much more attractive. But if you want to talk aggregates, basically, a bear market is about a year of declining

stock prices, with a decline peak to trough average of 25% to 30%. I think if we are going into a recession, most recessions are accompanied by bear markets. I don't want to tell you I have the answer. I have people that are very smart tell me the inflation rate is going to be 2% or 3% at the end of the year. And I have others like myself think inflation is going to be twice what the Fed says is acceptable. One thing I know for sure, the Fed has been asleep here.

I said on your program not last month, but six months ago, that if Powell was right on inflation being transitory, I would tip my hat to him. You know, 64 percent of a typical business course is labor. Labor is not moderating. There are a lot of things going on that trouble me. But I would say stocks versus bonds don't trouble me. I think stocks are basically cheap. So you mentioned you mentioned the Fed. I mean, do you think when the Fed took 75 basis points off the table now, I use that, you know, look, they're going to do what they have to do if you take them at face value. But Powell was fairly explicit at saying it was

50 what we just had and it's going to be 50 and then 50 at the next two meetings, seeming to take 75 basis points off the table. As critical as you are of the Fed, was that a mistake? Should he have been more open? I don't think he should. What David Tepper told me after the fact was that the Fed had a bit of a credibility issue. No question about it. Listen, I've said this to you a year ago. The Fed and the administration has elevated societal issues relative to inflation as their key concern. That's it. We're spending money like drunken sailors and we have interest rates well below what is an appropriate level. So, you know, it is clear that they've elevated societal issues relative to

inflation. The Fed wanted more inflation. Now they've got more inflation. They don't know what to do with it. But, you know, I don't want to say that we're uncharted territory. You know, every economic recovery sows the seeds for the next recession, and every recession sows the seeds for the next recovery. OK, we have had very inappropriate fiscal monetary policies. We pulled demand forward. We saw a lot of craziness in the stock market. See, intuitively, I find with all the crazy stuff over the last few years, the meme stocks, the SPAC baloney. Now Goldman, who was involved in SPAC, saying we're not going to do SPACs anymore.

Now the public has been bagged. They're not going to do SPACs anymore. Now the public has been bagged. They're not going to do SPACs anymore. We've had a very, very speculative environment. It's hard for me to imagine that that speculative environment ends with a soft landing. That's just my intuition. When you were last with us, this sounds like we're on a game show where every time you make a point that someone agrees with, they text you and your phone goes off. That's neither here nor there. I'm getting it.

I wish they'd stop them taking all these instant messages. They're throwing me off. Okay, that's what it is. People well-intentioned. That's what I keep hearing. I have no control over it. All right. Everybody, stop sending Lee instant messages.

Is your exposure lower today? It was 68 percent when you were last with us. Is it slowly taking it down or is it the same? No, it's the same. I'm not a trader. I'm an investor. And I've said in bear markets, he will lose his least wins. I was up until yesterday. I had a disastrous day yesterday. I lost money. I'm now down in the year. I got 20% energy. I think they're very, very inexpensive. They're all selling at three to four times cash flow.

They discount $65 a barrel oil and 350 gas. And I feel pretty comfortable with them. As I was saying before, I think the second half of the year is going to be very much a function of the rate of inflation. If the rate of inflation moderates like some of the bulls think, 2% to 3%, the Fed is going to be finished sooner, and the stock market won't go down a lot. But if inflation is 5% or 6%, the Fed will continue to tighten until they push us into a recession. And I think there's no question the Fed has a credibility issue. The Fed has overstayed their position for quite some time. Very smart

people in your program have talked about inflation being a more serious problem. And I'm one of those and maybe I'm wrong. You know, well, let me ask you this. Are you how closely are you paying? It's going to pay attention to this to the CPI tomorrow? I hear people referring to it as the Super Bowl. I mean, it has that much importance, especially given the uncertainty that we've all been experiencing. I think it's baloney. What's the difference if the CPI goes from 8.1 to 7.9 or 7.8? You know, I think the issue is the end of this year. And if the inflation rate is running 5 or 6 percent and you believe that interest rates are far too low, as I believe that they are, then I think ultimately the stock market is going to have a problem.

I repeat what I said before. Bear markets have two elements. They have an element of duration. They have an element meaning duration, meaning time. They have a magnitude of decline. So, you know, typical bear market at 25, 30 percent down, it lasts about a year. And I think given the speculative fervor we've had over the last few years, it's hard for me to believe that we're going to go up dramatically anytime soon.

Let's do this, Lee. If you do me a favor, let me take a quick break. We'll come back and finish our conversation on the other side. In the meantime, we do have a CNBC News update with Shepard Smith. Hi, Shep. Hi, Scott. From the news on CNBC, here's what's happening late this afternoon. Hello. The White House says this afternoon that a federal gas tax holiday to ease prices is still very much on the table. According to AAA, the price of gas is back to an all-time high of $4.37 a gallon today. Elon Musk says former President Trump should never have been banned from Twitter. He told an automotive conference in London today that the original

decision to ban the former president was morally wrong and flat-out stupid. Elon Musk said if and when he acquires the social media network, he will reinstate the former president. And the celebrity chef Mario Batali found not guilty. He was charged with indecent assault and battery after an alleged incident back in 2017 with a woman at a bar. Batali waived his right to a jury trial. The judge said the accuser had credibility issues and that there simply wasn't enough evidence to find Batali guilty.

Tonight, analysis of today's market moves with Andrew Ross Sorkin, plus the weapons that cops found at the end of that Alabama fugitive manhunt, plus see the first planned hotel in space on the news. Right after Jim Cramer. 7 Eastern, CNBC. Scott, back to you. I'm going to make sure your number one fan, Lee Cooperman, is watching the show tonight. Whoever put a second camera over here, I heard him and I appreciate it.

But, you know, somebody got to tell him, we're here, Mr. Cooperman. Yeah, that's right. Yeah, that's right. All right, Shep. We'll see you in a little bit. All right. That's Shepard Smith. We will take a quick break. Then we will pick up our exclusive conversation with legendary investor Leon Cooperman.

That's right. When we come back. We're back with legendary investor Leon Cooperman. I wanted to talk to you about mega cap tech, Lee, because I know that you at least had large positions in both Alphabet and Microsoft. And as I look in just the past, let's say, four sessions alone prior to today, really three I'm looking at, we're talking about about three hundred billion dollars in collective market cap wiped out of those stocks. What do you make of mega cap tech in the here and now as it relates to you specifically with those two names? Have you been adding, do you add on the weakness? I think I said to you last time, I'm a seller on strength and not a buyer on weakness,

which is unusual for me. Okay. I want to repeat three things I said before, then I'll answer your question. First thing I said, basically, you know, you said that I said in my last appearance. Let me just hang up here. Hold on. Anyway, I'm a popular guy. People don't know about leaving me alone when I'm on TV. Anyway, you said in my last appearance, I thought the fair value was about 18 times earnings and 18 times the 4,000. Fair markets don't end at fair valuation. They end at undervaluation. I want to repeat that.

They end at undervaluation. Typical bull market tops are 20% overvalued. You got the 4,800. That's a 20% overvaluation. You can get the 20% undervaluation. Okay. Second comment I would make is what I said before. I repeat, the best evidence that the stock market discounted the right economic scenario is when a company

comes out with disappointing earnings, the stock opens up down and close the day unchanged. That's what your viewers should be watching for. I'm watching for that intensely. I don't see any evidence of that. OK. The third thing we have to understand is the market structure is destroyed in front of the eyes of the SEC. I wrote the head of the SEC at that time who did not respond to my letter in December of 2018. I said to him, listen, there is a swing. I think you've written everybody about the uptick rule. Yeah, I did. OK, but guess what? When I joined the industry 60 years ago or whatever, 1967, so it's 55 years ago, we traded stocks for 25, 50 cents a share and the Volcker rule didn't exist. So the firms, my good friend Bob Mnuchin, Stephen's father, would go out there and the last

sale and uptick rule, he would basically try to get the salesmen to generate inquiries because he wanted to bid for inventory. That doesn't exist anymore. Number two, 50 years ago, the specialists handled 80% of the volume in New York Stock Exchange. Today, 80% of the volume is done off board in dark pools. So the specialists are not effective. And thirdly, we eliminated the uptick rule, which gave rise to these high-frequency traders that know nothing about value. They know everything about price. So they create overvaluation. They create undervaluation with huge swings, which undermines the confidence of the public. The SEC seems to me to be focused strictly on trading costs and not on the effect that some of the decisions are having. You know, I got a big kick out of it. Damn it. Anonymous call me.

I got a big kick out of that. Gensler was worried about the big pools of pension fund money, whether they're getting ripped off by private equity in the fees they charge, and their sophisticated group of investors, and not worried about the public being screwed by all these dramatic swings in the market. So I would say charge and their sophisticated group of investors and not worried about the public being screwed by all this dramatic swings in the market so i would say market structure is destroyed okay everyone loses in a bear market okay um and i think the key go ahead and then technology and technology what about the stocks i asked you about what about the stocks I asked you about? What about the stocks I asked you about? All I did is I sold options against my Google, my Amazon and my Microsoft.

OK, I got out of Apple far too early. So I don't have that one to worry about. And I sold my Facebook at much higher levels. So I'm optioned off. But, you know, you make some option premium cushions, the loss. I was up, as I mentioned, up until yesterday. I'm down. I think I'll get it back. But, you know, I'm up to buy certain things. I have a team of two analysts. I don't have a team I used to have, but my team of analysts love everything we're involved in. What are you buying? I've got

to go, but I want to know, if you're looking to buy some things, can you tell me what they are? Well, what I would buy, as I have four energy stocks I like, five energy stocks, I talk to them. Paramount Resources up in Canada. Damn it, I know people don't understand. Lee, this is turning into a sitcom. This is supposed to be a serious interview. It's turning into a sitcom. It's a serious interview. I'm a very serious guy. I'm serious and I'm trying to help you.

And I would say that basically I like Paramount resources up in Canada. I like Tourmaline resources up in Canada. They're selling at three times cash earnings, big dividend paying capability. I think oil stocks generally are discounting $65 barrel oil and 350 gas. And I think the Ukraine war is probably at $25 the price of oil. But ex-Ukraine war, I think that oil will stay at a much higher price than is being discounted by these stocks. Watch the CPI, a number of 7, 8, 7, 9, 8. If the market goes crazy, basically, I would ignore it.

You know, we need much lower inflation, 2%, 3%. And that will be a fourth quarter event if we're lucky. And I don't think it's going to happen that way. I think inflation will be higher than people think. Okay. Let's leave it there. And watch how stocks act in response to bad earnings.

That's the key. Everybody wants to call a bottom. They can't call a bottom. The market will tell you when it's over on the downside. The market will tell you. Lee, I appreciate your time so very much. I apologize for the interruptions. I don't control it. I know you said it to stop text messaging me. Apparently they did. They stopped texting you and they started calling. It's all good. I don't control it. I know you said it to stop text messaging me. Apparently they did. They stopped texting you and they started calling. It's all good. You call me later, please. We will talk to you again soon. That is Lee Cooperman.

What can I tell you? We're watching some big stock movers in the OT. Christina Parts and Nevelis is tracking the action. I feel like I should call you right now. Please do. Please do. OK, so what do we have? We have Warren Buffett, a pair of Allbirds, and maybe a Chanel vintage bag. I'll have what they all have in common right after this break. And yes, it's going to be fun. But the phone won't ring. Welcome back.

We're tracking some big stock moves in the OT. Christina Partsenevelis is here with that. Hi, Christina. Hi, Scott. So, oil producer Occidental Petroleum posted first quarter results that beat on the top and bottom line. We've got earnings per share that came in at $2.12 versus the $2.03 the street was estimating. The stock is down slightly on the news, over a little bit over 1% lower. Keep in mind, Warren Buffett's Berkshire Hathaway has amassed a major 15% stake in Oxy. This would be Berkshire's eighth largest. Searching gears, footwear and apparel company Allbirds posted a loss of 15 cents on first

quarter revenue, and the revenue came in at about 60, a little bit shy of $63 million. The shares, though, plunging over 12%. The company said Russia's invasion of Ukraine and China's COVID restrictions impacted their performance, especially the performance of their international business in Q1, and is, quote, expected to persist for the remainder of 2022. So guidance came in lower. The swing is massive. Market cap is really small. So keep that in mind.

Burd down 84% since its IPO. And since we're sticking with retail, that is the theme. Shopping, the company that sells secondhand luxury like those secondhand Chanel purses. The real, real shares are soaring over 9% after posting a smaller than expected loss. Shares, though. Again, another small market cap company still off more than 70% from going public in 2019. I think my phone's ringing, Scott. I got to go. Yeah. Yeah. Sorry. Bad joke. Bad joke. Christina, tell you. Thank you. Oh, my God. All right. Up next, Santoli's last word, his read on today's market

action. And as we head to break another check on Coinbase on the back of earnings, the call kicks off in less than an hour. We've already had many calls, but that call kicks off in less than an hour. We're back right after this. Welcome back. In today's Halftime Overtime, Omega's Lee Cooperman telling me just moments ago he does not see signs yet of a market bottom and that a dramatic move higher from here is unlikely. Joe Terranova is back on set with us.

No bottom. So he's not ready to declare that we have seen the worst of the selling yet. OK, Fed has to restore credibility first. I think at some point Chairman Powell will walk back what he said in response to Steve Leisman. I know he will never do it. But if that inflation print is hot tomorrow, 25 basis point hike, intrameding. Why not? We did it back in 2020. We did it back in 2008. The Fed needs to start running at the same pace that the market is if it wants to get to the finish line. Let me ask you this. What if the CPI is hot tomorrow? Because, I mean, everybody is pointing to it. And there seems to be almost like a scary foregone conclusion that it's going to show that inflation has peaked. What if it has not?

You're going to see a continued absence of liquidity in the derivatives market in response to the lack of credibility on the part of the Federal Reserve. And risk assets are going to experience a further decline until the Federal Reserve runs at the same pace as the market. Are you looking to be like Lee, a seller of strength? He is looking to buy some things that he likes. I mean, there are a lot of stocks that, you know, many say are, quote unquote, on sale. I mean, I'm not going to declare that because that's not what I do. But we talk to enough people who say, you know, these bunch of stocks are on sale. Depends which ones. But are you looking to buy anything? I have no interest in buying a lot of the hyper growth, high valuation stocks.

I think, as I said, those are an L-shaped recovery. But yes, I am a buyer of stocks. I think through the month of May, through the month of June, we're going to get to a place where markets are going to be able to recapture the losses. I think the wild card in the market, I think the asymmetric risk resides itself in the tariffs. I still think the Biden administration, President Biden has available to him the ability to temporarily suspend, vacate or relax the tariffs

in the best interest of the country. The asymmetric risk in that is the market goes up a lot. All right. I appreciate it, Joe. Thanks. Let's Joe turnva here with me. Up next is Santoli's last word. Last call to vote in today's Twitter question. We're asking which fintech stock is most attractive after its pullback. You can head over to at CNBC Overtime.

Cast your vote. Is it SoFi, PayPal, Affirm, or Upstart, which had a big down draft today? Give you the results next. All right, we're back in overtime for the results of our Twitter question of the day. Which fintech stock most attractive after its big pullback? 57% of you say SoFi. That's big. Well, no one likes Upstart down 50 percent. All right. Let's get to Mike

Santoli for his last word. Hi, good branding. Yeah. What's your what's your last word? I'm going to say hold. I think today was basically a hold. I don't think this indecisive action changed anyone's mind, whether you think that we're going to cascade lower from here or not. But it represents a little bit of decompression ahead of this big catalyst tomorrow, potential catalyst in the CPI number. Very difficult to handicap how the market absorbs that almost no matter what the number is. Eager for signs of peak inflation. But I think, you know, we've had good bounces this year in this market from less stretched conditions. I think that's what you have to acknowledge. Now, everyone will say this is a defined downtrend. The threshold is higher. We're seven and a half percent up from here in the S&P until we get to last Wednesday's close. Let's think about that. Let's just think about how much of a range we've been in for a while right here. And I think, you know, even some people who are leaning negative in the medium term are saying you can't discount the idea that we can just lift for a little bit. Does retaking 4,000, which is over your left shoulder on television right now, mean anything?

I would say not very much. I just think that what does mean a little something, and it's only, you know, might expire at 9.30 a.m. tomorrow, is that the stocks that were under liquidation the day before, it seemed like people just were in get-me-out mode, did not continue lower. I mean, the big ones did not continue lower today. So the Tiger Global portfolio that people have been targeting didn't necessarily have another down leg. And all you can say from that is, OK, I guess nobody was that badly trapped by what happened yesterday. About 40 seconds or so less.

I mean, you study this whole price and time thing, too, as a lot of people have been referring to in terms of bear markets. And we haven't really had enough time, so to speak, and maybe not enough price either. No, possibly not. I mean, look, right now it represents to some degree what we saw in early 2016. But we got really lucky there in a lot of ways with what the Fed was able to do. I think no matter what happens from here, even if the low is in, it's going to have a long way to repair itself. It's going to be scares along the way. It's not almost certainly not going to be any kind of a V and nothing says the low is in. We talked about yesterday, you know, thirty eight hundred, thirty nine hundred as people looking for potential targets. CPI tomorrow. We are going to see Mike. Thank you. That's Mike Santoli. I'll see you right back here tomorrow.