Leon Cooperman, the former hedge fund manager who now runs his own family office, said financial markets are overpriced as stocks have become too costly relative to company profits.
Cooperman, the billionaire chairman and chief executive officer of Omega Family Office, said a market correction is due with the possible threat of stagflation or a recession.
“The stock market is not discounting the uncertainty of the environment in a proper manner,” Cooperman said in an interview from Boca Raton, Florida. “I look around the world and I say between Iran and the lack of leadership in Washington and the lack of integrity in Washington, that the market doesn’t deserve to be where it’s selling. It’s too expensive.”
In recent months, the S&P 500 Index has traded as high as 23 times the next 12 months’ estimated earnings, the benchmark’s richest valuation since 2020.
Economists surveyed by Bloomberg assign a 25% probability of recession, while more recently, analysts have been assessing risks from a prolonged conflict in Iran. Mohamed El-Erian, the former chief executive officer of Pacific Investment Management Co., has warned of a “new stagflationary wind” starting to blow through the global economy. Natixis economists have outlined scenarios in which US growth slows to as little as 0.5% this year, or in the worst case contracts for several quarters, if the war broadens.
Cooperman, who converted his hedge fund firm into a family office in 2018 and is worth $3.8 billion, according to the Bloomberg Billionaires Index, said the market’s volatility is also a cause for concern. Volatility reached its highest level since April 2025’s tariff shock amid the US and Israel’s war with Iran and oil price swings. The S&P 500 saw intraday swings of at least 1% on more than half of this year’s trading days.
“Good news is treated with a yawn and bad news basically sends a stock down 15% or 20% on average,” Cooperman said.
Written by: Nacha Cattan — With assistance from Matthew Griffin @Bloomberg
The post “Leon Cooperman Warns Markets Overpriced With Geopolitical Risks” first appeared on Bloomberg