By Shawn Langlois, MarketWatch
John Templeton once famously said, “Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.”
Leon Cooperman, billionaire chairman and CEO of Omega Advisors, says we could be “knocking on the door of euphoria” if the rally continues.
‘The market is in a zone of fair valuation... if we have a big move from here, I think it’s the close-out move.’
That big move, he told CNBC on Thursday, would amount to a rally in the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.28% above 3,100. At last check, the broad market gauge was bouncing around all-time records with a 1% gain at 2,951. The narrower Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.09% was also higher.
“I’d be reducing my exposure” to equities if that level is reached, Cooperman said. He has about 75% of his fund, which is now closed to outside investors, in stocks, with the rest invested in fixed income.
Cooperman, like many others, questioned the wisdom in cutting rates when the market’s already banging out new highs. He described the Fed’s monetary policy, which is signaling potential rate cuts later this year, as “inappropriate,” and said the fed funds overnight lending rate should be at 3% not 2%.
Watch the full interview: