Speaker 1: This is Master's in Business with Barry Ridholts on Bloomberg Radio.
Speaker 1: This week on the podcast, I have an extra special guest,
Speaker 1: and you are in for quite a treat. His name
Speaker 1: is Leon Cooperman and what a storied background he has,
Speaker 1: from Hunter College to Columbia NBA to Goldman Sachs who
Speaker 1: Omega Advisors. Essentially, we discuss everything from value investing and
Speaker 1: growth in a reasonable price to what it's like to
Speaker 1: have dinner at the White House with President Trump. UH.
Speaker 1: He is a participant in the Giving Pledge, where he
Speaker 1: has committed to giving away all of his billions of
Speaker 1: dollars to various philanthropies, including Columbia University, Hunter College. He
Speaker 1: UH funds a program in New Jersey that sends five
Speaker 1: hundred students to college. UH and there are few p
Speaker 1: people who know as much about the industry of investing
Speaker 1: as he does. He has seen it from just about
Speaker 1: every angle, be it creating Goldman Successet Management Division to
Speaker 1: beating the SMP five hundred by a substantial percentage over
Speaker 1: a long period of time at the Hedge Fund. I
Speaker 1: think you'll find this to be an absolutely fascinating conversation.
Speaker 1: And so with no further ado my Master's in Business
Speaker 1: conversation with Lee Cooperman. My special guest this week is
Speaker 1: Lee Cooperman. He has returned guest and we decided to
Speaker 1: bring him on because of some changes that he has
Speaker 1: made to his hedge funds Omega, which was launched in
Speaker 1: and has substantially beat the market by a fairly wide
Speaker 1: margin since then. Lee went to Hunter College undergrad got
Speaker 1: NBA from Columbia Business School, where he went with a
Speaker 1: number of esteemed colleagues. He joined Goldman Sachs in nineteen
Speaker 1: sixty seven, where he spent twenty two years in investment research,
Speaker 1: where he was frequently voted onto the Institutional Investors All
Speaker 1: America research team for portfolio strategy. He helped create and
Speaker 1: launched the Goldman Sacks Asset Management Unit, where he was
Speaker 1: eventually Chief Investment Officer, Chairman and CEO UH prior to
Speaker 1: launching Omega hedge fund in Lee Cooperman, Welcome back to
Speaker 1: bloom So. You recently set out a notice that you
Speaker 1: were converting Omega to a family office, and I thought
Speaker 1: that was as good an excuse as any to get
Speaker 1: you back UH into chat about markets in the economy.
Speaker 1: But first let's talk about that conversion. What was the
Speaker 1: thinking behind it? What what motivated that? Well, two factors.
Speaker 1: I turned seventy five in April, and I recalled reading
Speaker 1: somewhere that the statistics say, if you make it past
Speaker 1: sixty five and cancer doesn't get you, on average, will
Speaker 1: make it to eighty five. And I did not want
Speaker 1: to spend the next ten years, the remaining ten years
Speaker 1: from average running after the SMP and there would solidified
Speaker 1: that was. I went to a concert with Kenny Rodgers,
Speaker 1: the country and Western singer who I and like his talent,
Speaker 1: and I found an interesting He was having great difficulty
Speaker 1: negotiating a stage, getting around, and he made the comment
Speaker 1: that he's turning eighty, he shouldn't be doing this anymore.
Speaker 1: But he's on his fifth marriage. He needs the money.
Speaker 1: And I said to myself, and though I've been lucky,
Speaker 1: having married fifty four years to one woman, I don't
Speaker 1: need the money. My money is going back to society
Speaker 1: through charitable giving. Um and uh. I wanted to fold
Speaker 1: at the top. So you know that's the difference between
Speaker 1: you and Rogers. You know when to hold them and
Speaker 1: went to fold them. Apparently Kenny does not. I hope.
Speaker 1: So basically, um Over the years, I've noticed, particularly in
Speaker 1: two thousand and eight, that a lot of hedge funds
Speaker 1: close up when they're down, and I don't consider they're
Speaker 1: just a personal view. I'm not moralizing, but I think
Speaker 1: a high water mark is an asset of the investor.
Speaker 1: And if you basically close up and give them their
Speaker 1: money back involuntarily, there was one thing that the investors, look,
Speaker 1: I had enough, I want my money back. They get
Speaker 1: their money back. But to give them their money back
Speaker 1: when they don't want it and they're willing to bet
Speaker 1: on you turning the ship around is not right. So
Speaker 1: I was up in the sixteen seventeen, them up about
Speaker 1: seven percent this year. So everyone that's with me at
Speaker 1: this moment time is it a record high and their
Speaker 1: capital count and now's the time to fold them? Because
Speaker 1: I do believe looking out Uh you know, I'm not
Speaker 1: a pessimist, but I think it's stands the reason that
Speaker 1: who have a market setback. I tend to be more
Speaker 1: long oriented and I don't want to be seventy seven
Speaker 1: years old owning some of the high water mark and
Speaker 1: feeling obligated to stay in business. What did clients say
Speaker 1: when you notified them, Hey we're here's some capital back.
Speaker 1: Thanks for sticking around for twenty six years. Uh, I've
Speaker 1: been very gratified. I'm not shocked, to be honestly, I
Speaker 1: don't want to stund self serving, but yeah, I've lived
Speaker 1: a very straight life. I've run the business and always
Speaker 1: through the eyes of the investor. And the emails I've
Speaker 1: gotten are just off the charts. Uh, favorable. I could
Speaker 1: read some of the m to you. I don't want
Speaker 1: to take your time, but it's um, it's very very gratified.
Speaker 1: Hold on to those. We're gonna come back to some
Speaker 1: of those emails a little later. Um. Internally within the firm,
Speaker 1: what was the decision making process? Like you obviously have
Speaker 1: employees were the most painful part of the decision. The
Speaker 1: most painful far and away is I have to resize
Speaker 1: the staff. You know, I have between thirty five and
Speaker 1: forty loyal working, very competent people, whether it be analytical
Speaker 1: or support. And in the family who officers, I'll probably
Speaker 1: have twelve to fifteen. So I have to help place
Speaker 1: or take care of upwards of and uh, that's the
Speaker 1: most painful part of it. You know, I've spent twenty
Speaker 1: six years building the right team, the right infrastructure, right computers, programs,
Speaker 1: everything to run the business. And I love what I do.
Speaker 1: To be honest with you, I do what I love. Uh.
Speaker 1: In fact, tonight I'm speaking to thirty five students at
Speaker 1: Columbia Business School. I tell them the secrets of successes.
Speaker 1: Do what you love, love what you do. Don't go
Speaker 1: in through a field for money. Go into a field
Speaker 1: because you have a passionate about it, and I have
Speaker 1: a passion about investing. We're not going to continue to do.
Speaker 1: I just did not want to have the responsibility of
Speaker 1: running other people's money at this stage of my life.
Speaker 1: So I've called you the hardest working man. And Hedge Funds,
Speaker 1: you know you're quoting my mutual friend Doug cast Brown
Speaker 1: of Hedge Funds is where I was gonna go with. Doug.
Speaker 1: Doug called you, um, when you this this transition, Are
Speaker 1: you still going to be starting at ungodly early hours
Speaker 1: and reading writing reports till midnight? Or is that right now?
Speaker 1: My alarm clock goes over five fifty in the morning,
Speaker 1: and I spent nar in ten minutes coming in from
Speaker 1: the suburbs to New York and nar and ten minutes
Speaker 1: going home at night, and I expect that I'll sleep
Speaker 1: a little bit later, but I'll visit more companies, will
Speaker 1: be intense. I will be oriented towards long term capital games. Uh.
Speaker 1: The SMP five will be in irrelevancy to me. Uh
Speaker 1: with right now, it's not. My investors paid me a
Speaker 1: fancy fee and they deserve to get the best performance
Speaker 1: I can give them. But I'm gonna be managing the
Speaker 1: money for AfOR tax returns after tax returns. So that's uh,
Speaker 1: that's a substantial change. What other changes are you looking at?
Speaker 1: You don't strike me as a golfer. I'm not a golfer.
Speaker 1: But I have a particular problem now as we sit
Speaker 1: here talking. I ride a bicycle in Florida every day
Speaker 1: and some octogenarian was not careful his golf cart and
Speaker 1: he hit me while I was riding my bike and
Speaker 1: fell on my shoulder. And I have a four and
Speaker 1: a half sent to me to rotate a cuff tear,
Speaker 1: which is, you know, reasonably painful, but at this kind
Speaker 1: of ending my golf days unless I go for surgery
Speaker 1: for repair, and the surgery I'm told it's very complex
Speaker 1: and the terrible. A year of physical therapy, you you
Speaker 1: got it. And so basically I've been to four different
Speaker 1: doctors and they all said the same thing. The only
Speaker 1: reason I have surgery is if you're can't sleep at night,
Speaker 1: you're in excruciating pain or affects your lifestyle. Thankfully, I'm
Speaker 1: able to sleep at night. The pain is mild but
Speaker 1: reasonably consistent, and it has affected my lifestyle. But I'm
Speaker 1: not a passionate golfer, so I'll live with it, and
Speaker 1: I go to physical therapy twice a week and they're
Speaker 1: trying to build up the muscles in the area to
Speaker 1: compensate for the tear. Huh. Let's talk about those days
Speaker 1: in when you first started. Jim Chano said, when he
Speaker 1: began his fun there were only a few hundred UM managers,
Speaker 1: and most of them were generating alpha. Today there's eleven
Speaker 1: thousand hedge fund managers, and it seems the same few
Speaker 1: hundred are generating alpha. What was it like back in
Speaker 1: when you launched Omega, Well, there was less competition. I'm
Speaker 1: not sure what the exact number of hedge funds were,
Speaker 1: but one of the statistics that strikes me is about
Speaker 1: a decade ago to today, the number of publicly traded
Speaker 1: companies are down by about because it merges consolidations going private.
Speaker 1: In that same period, hedge funds are have gone up
Speaker 1: by fourfold. So you know, a number of companies down,
Speaker 1: number of competitors looking for alpha up fourfold. So you
Speaker 1: know it's difficult. But I never went into the hedge
Speaker 1: from business to make a lot of money. I was
Speaker 1: a very happy partner of Goldman Sachs. I was I
Speaker 1: think at the time, fifth high percentage partner of the firm.
Speaker 1: The firm was doing well. I loved what I did
Speaker 1: for a living, but I wanted to start a hedge
Speaker 1: fund as a way of code investing with my investors
Speaker 1: respective investors. And the firm at that time wasn't ready
Speaker 1: to have a hedge fund because they were they have
Speaker 1: vision in their mind which was incorrect in my opinion,
Speaker 1: that I would be short some investment banking client at
Speaker 1: the firm. The client would find out, find out and
Speaker 1: they'd have hell to pay. Um. The fact of the
Speaker 1: matter is I'm a long term investor and uh and
Speaker 1: that had the problem. And the firm is really the
Speaker 1: views of maturated because I think they have a lot
Speaker 1: of hedge funds on the premises. Now, in fact, there
Speaker 1: has been a fairly steady stream of people departing Goldman Sachs,
Speaker 1: but retaining the relationship with Goldman as a prime broker
Speaker 1: for for that hedge fund. What was the big change?
Speaker 1: You know, you when you left Goldman, you had previously
Speaker 1: said they were they were pretty supportive of everything you do.
Speaker 1: You know, how did they manage to mature their views
Speaker 1: on this? Well, just a passage of time, you know, Uh,
Speaker 1: if you go back to ancient history. Really a decade
Speaker 1: before I left, I was telling Goldman they were they
Speaker 1: were making a very big mistake by not being an
Speaker 1: asset management. And the senior partners at the time said,
Speaker 1: you don't get it. Lead. We're of the view that
Speaker 1: brokers should do brokerage, money manage and do money management.
Speaker 1: Don't compete with your customer. And I al would say,
Speaker 1: then wake up, smell the roses. Look at they have
Speaker 1: Merrill Lynchs in management. You have Webster, which the division
Speaker 1: a kid at Peabody CSFPSI management. Everybody was in the
Speaker 1: business except one firm who they viewed as their arts rival.
Speaker 1: In trading, there were Solomon Brothers and one day, Solomon
Speaker 1: announced that Bob Solomon Jr. Who's a good man, was
Speaker 1: leaving the research department to start Solomon Brothers Asset Management,
Speaker 1: at which point the Steve Friedman and Barb Brubin collb
Speaker 1: me and said, you know you were right. We made
Speaker 1: a mistake. We should go into the business. Would you
Speaker 1: leave research and start asset management and build us a
Speaker 1: business like you built us in research. For the record,
Speaker 1: not blowing my own horn, but just factually, when I
Speaker 1: took over Golden Research and D and I guess there
Speaker 1: was seventy five seventy four road unranked, and when I
Speaker 1: left the research department, we were number one. I I
Speaker 1: number one in Greenwich Research, number one in financial world.
Speaker 1: I also happened to be the lead strategist, and I
Speaker 1: was number one for nine straight years in strategy. So
Speaker 1: I was ready for new challenge. And I accepted their
Speaker 1: invitation and started Goldmen's Access in Management. And frankly, about
Speaker 1: a year after I started, I realized I had made
Speaker 1: a mistake. The firm is a great firm, and they
Speaker 1: understood assets in the management times fee equal revenue, and
Speaker 1: they were interested in me building a big business. I
Speaker 1: was really focused on investment performance. I wanted to co
Speaker 1: invest with the investors and build a track record. And
Speaker 1: it became obvious to me that, you know, they wanted
Speaker 1: me on the road innovating new products, raising more money,
Speaker 1: and I wanted to manage the money. You know. I
Speaker 1: was a guy that discovered Henry Singleton of Teldine in
Speaker 1: Wall Street and made a big bet on him and
Speaker 1: proved to be correct. And so I went to them
Speaker 1: and said, look, you know, I'd like to start a
Speaker 1: hedge fund as part of the asset management business. And uh,
Speaker 1: they originally said yes, and then they changed their mind,
Speaker 1: and they changed your mind again. All this is nuances.
Speaker 1: They had a sponsored a fund called the Water Street
Speaker 1: Recovery Fund, which was a vulture fund. They would buy
Speaker 1: up the stress debt from the fault of the issuers
Speaker 1: and reorganized them. And that created some consternation from the
Speaker 1: high yeld clients of the firm. They were selling them
Speaker 1: bonds which they didn't know the firm was intending to
Speaker 1: restructure the companies, and so they had a lot of
Speaker 1: adverse biblicity. John Weinberg, bless him, Uh, it was impressed
Speaker 1: by the negative, you know feedback, and went in and
Speaker 1: closed the fund down and returned all the money. And
Speaker 1: they came back to me and they said, you know,
Speaker 1: forget about We're not going to go for the frying
Speaker 1: pan to the fire. No hedge fund will put you
Speaker 1: on the executive committee and you run g Sam. It's
Speaker 1: a business manager, not as a money manager. You couldn't
Speaker 1: be a money manager because you come into contact and
Speaker 1: a lot of confidence information if you're on the executive committee.
Speaker 1: And I told him my wife. I went home, what
Speaker 1: a boat. My wife came up with a great line.
Speaker 1: She said, you know how old you're gonna be and
Speaker 1: how rich you're gonna before you do what you want
Speaker 1: to do. So I went back. I said, listen, that's
Speaker 1: been a great place to me, Goldman. I really want
Speaker 1: to manage money. Uh and uh basically, UM, you know,
Speaker 1: I'll stay as long as you want me to stay,
Speaker 1: but I would like to basically ultimately. And I stayed
Speaker 1: for a year and consulted for a year, and it
Speaker 1: was a great place. I grew up at Goldman, and
Speaker 1: I have great, great feelings about Goldman. So walk us
Speaker 1: through what your process was like at Omega or is
Speaker 1: still like it Omega When you're trying to make you
Speaker 1: still we're still in business and Omega and uh, I'll
Speaker 1: run it the same way. I like to have a
Speaker 1: lot of arrows in my quiver. You know, it's very
Speaker 1: hard to take fifteen off the top and beat the market, okay,
Speaker 1: and so I like to have a lot of different
Speaker 1: strategies that I could pursue and um. Basically, we try
Speaker 1: to make money for the investors in five different ways. First,
Speaker 1: stocks or high risk financial assets. Short term bonds in
Speaker 1: cash are low risk financial assets. And we spent a
Speaker 1: lot of times is Steve Ian who are my partner,
Speaker 1: we've been working together for over forty years. A terrific guy.
Speaker 1: Terrific guy, and we spent a lot of time studying
Speaker 1: the economy, the FED valuation and trying to figure out
Speaker 1: is the market undervalued going up, overvalue going down, It
Speaker 1: could be fully valued going up, etcetera. Because that de
Speaker 1: termines our exposure to risk assets. Number two, all the
Speaker 1: studies I've read on portfolio returns say more important being
Speaker 1: the right individual stock in anyone years also being the
Speaker 1: right asset class. So we spent a lot of time
Speaker 1: looking at returns in fixed incomeverse equities and fixed income
Speaker 1: we cover the gamut where government bonds, high grade, industrial bonds,
Speaker 1: high yield bonds, structured credit, and we're trying to look
Speaker 1: for the store hat in the winter. What's the mispriced asset? Okay?
Speaker 1: The third thing we do we shually have bread and
Speaker 1: butt of business, was right? Spend most of my time
Speaker 1: is UNDERVAD stocks and alongside uh not a successful We
Speaker 1: spend time looking forward a stocks in short side. And
Speaker 1: then we do a certain amount of macro trading where
Speaker 1: we'll basically go longer, shorter, currency, longer, shorter commodity, longer
Speaker 1: short and index away from the SMP five hundred, and
Speaker 1: we risk about two percent of capital in the macro
Speaker 1: area to make it an incremental five or six percent
Speaker 1: a year. So I would bill Omega saying we're an
Speaker 1: equity oriented hetche fhow with a macro capability. So let's
Speaker 1: let me put some numbers, some flesh on the bones.
Speaker 1: You return twelve point six percent a year net of
Speaker 1: fees versus nine point six percent for the SMP five hundred,
Speaker 1: about a third better than the broad index did. What
Speaker 1: do you think is the single biggest contributor to that
Speaker 1: out performance? Well, you know, uh, number one with the records. Okay,
Speaker 1: there are better records around, but you know you've got
Speaker 1: address for risk. We've done it, maybe set long over
Speaker 1: twenty six years, twenty six years, and I said, we
Speaker 1: were disciplined. You know, we're we're value oriented. So as
Speaker 1: I said before, we figured trying to figure out the market.
Speaker 1: We've got the market right a lot of the time.
Speaker 1: And then second we really look at individual stocks and
Speaker 1: my benchmark and I look at the SP five hundred
Speaker 1: and what is that represent Most people don't even know
Speaker 1: what the recup five represents an index of five companies
Speaker 1: that are growing about five percent a year that have
Speaker 1: a dive it in the yield of about one that
Speaker 1: have debt about the capital structure. I think I've mentioned
Speaker 1: growing about five six percent a year. And for that
Speaker 1: statistical compilation, you're paying about eighteen times earnings. So we're
Speaker 1: looking for more growth. More earning is more asset value. There,
Speaker 1: they're training around three times book value for a lower price,
Speaker 1: and that's what we do. So we just looking for value.
Speaker 1: And generally speaking, if you correctly identify value, that's one
Speaker 1: of the big protectors of your downside. If you're buying
Speaker 1: something as a reasonably cheap to begin with margin of safety.
Speaker 1: Let's talk a little bit about something we discussed the
Speaker 1: last time you were on and we had a kind
Speaker 1: of dance around it because it was still um an
Speaker 1: open live issue. Uh, you had a run in with
Speaker 1: the SEC. Tell us a little bit about that. What
Speaker 1: was it like when you first learned uh they were
Speaker 1: looking into Omega and how did it affect your your trader.
Speaker 1: Let me just say this, I entered into what's called
Speaker 1: and no admit and no deny agreement. So I don't
Speaker 1: admit I did anything right or wrong whatever the hell.
Speaker 1: But between last time you were here, you were pretty
Speaker 1: adamant you didn't do anything wrong. Yeah. Yeah, but like
Speaker 1: I said, I'll repeat, there's a sort to legally is
Speaker 1: below no no deny UM. I totally did not appreciate
Speaker 1: the power of the SEC, their abusive nature, UM, and
Speaker 1: the problems with the system where they served me. There
Speaker 1: was no broad escale investigation to also to trade and
Speaker 1: new was investigation to trade on one company and Uh,
Speaker 1: basically we told them when we received the subpoena that
Speaker 1: withdraw the subpoena. And I guess I want to make
Speaker 1: the point every step along the way where they had
Speaker 1: the chance to uprate in in a proper manner, in
Speaker 1: my opinion, proper matner. They basically rejected it. They tried,
Speaker 1: you aren't adversarial, you're very cooperative. Try to get them
Speaker 1: to sit down. Let me explain this to you. This
Speaker 1: is really very simple. Every step on the way they
Speaker 1: rejected it like they wanted to inflict maximum damage. We
Speaker 1: stay succeeded in doing so. We get to subpoena and
Speaker 1: I tell my lawyers, tell them, withdraw the subpoena. I'll
Speaker 1: meet with you. I'll answer all your questions, and if
Speaker 1: you don't like the answers, you can reinstate the subpoena
Speaker 1: and you have nothing to lose. They refuse, They say,
Speaker 1: respond to subpoena. So I spent a couple of million
Speaker 1: dollars or more. Respond to the subpoena and uh. Basically
Speaker 1: they then and my lawyer, you know, my lawyer basically
Speaker 1: tells me, and you're ruining the man's business. We've studied
Speaker 1: the trading. There's no inside trading here. It's unfair. And
Speaker 1: they went down to Washington and basically the guy at
Speaker 1: the AC says, well, if Mr Coopman wants to settle,
Speaker 1: will take a five year bar from the industry, the
Speaker 1: mission of guilt, effective admission of guilt, and ten million
Speaker 1: I'll fine. And I told my lawyer's look, you tell
Speaker 1: him whatever somebody from Harvard and Yale Law school tells them.
Speaker 1: I grew up in the South Bronx and you can
Speaker 1: give them the Rockefellow salute for me if your viewers
Speaker 1: know what that is. But when Nelson Rockefellow spoke, but
Speaker 1: the inmates of Attica and they shoutowed him down, and
Speaker 1: he got frustrated and he gave him the index finger
Speaker 1: or the adjacent to thee in the middle of the
Speaker 1: middle of thing, whatever that's called. And um, five months later,
Speaker 1: after my business was substantially damaged, the SEC, with no
Speaker 1: new information, comes back and says, okay, no admission of guilt.
Speaker 1: No no, it's called no admit, no deny, no time out,
Speaker 1: and give us four point nine million dollars. As lawyers say, congratulations,
Speaker 1: you win, And I said, what did I win? We
Speaker 1: don't have losing party pays in America. The government has
Speaker 1: sovereign immunity. I can't sue them. Uh, And they basically
Speaker 1: are using taxpay money to fund their piccadillos um. And
Speaker 1: so my advocacy after I close up Omega and become
Speaker 1: a family office is we should have a losing party
Speaker 1: pays system because what happens, so it shouldn't be a speculative.
Speaker 1: Let's just throw it against the walls lawyers. Again, I'm
Speaker 1: attributing this to my lawyers, which are factual in a
Speaker 1: court of law. You know, I don't want any problems
Speaker 1: with the sec. My lawyers say, congratulations, you won. Okay.
Speaker 1: If we go to trial, we think nine percent probably
Speaker 1: you're gonna win, but of course you let me finish,
Speaker 1: not even probably gonna win. Okay. The temper cent chance
Speaker 1: you don't win has nothing to do with the case
Speaker 1: is because you're rich. It's because you run a hedge
Speaker 1: fund and because you're a former Goldman Sachs partner. The
Speaker 1: juries don't like guys like you. I said, but listen,
Speaker 1: I'm sending five minute kids to college in Newark, New Jersey.
Speaker 1: They don't care. They don't like guys like you. If
Speaker 1: we go to trial, the change you win, we estimated,
Speaker 1: they'll tie you up for two years with appeals, and
Speaker 1: of course you twenty million dollars give him the four
Speaker 1: point one million. It's over, so I gave him the
Speaker 1: four point a million. I'm still conflicted about that decision
Speaker 1: to even today, because it just it bothers me. The
Speaker 1: system is wrong. The system is wrong. I don't want
Speaker 1: to go through all the facts of the case because
Speaker 1: that could be an hour and it will come to
Speaker 1: light when I write the book. So and you should
Speaker 1: write the book. But let me ask you this question.
Speaker 1: If a young colleague came to you, a person who's
Speaker 1: not running a few billion dollars, running a small hedge fund,
Speaker 1: and and he's screwed, Well, if he were to say
Speaker 1: to you, Lee, I have this. I think I'm completely innocent,
Speaker 1: and here's the deal. It'll cost me a couple of
Speaker 1: million dollars to make it go away. But I could
Speaker 1: fight and win. It will cost me ten times that.
Speaker 1: What should I do? What? What would your advice to them? Well? Number,
Speaker 1: when does he have the twenty million? Maybe probably not
Speaker 1: if he's a young guy and he's starting at he
Speaker 1: doesn't have the money. I spent close to fifty years
Speaker 1: developing my putation. God has been very good to me.
Speaker 1: I've worked very hard, but you know, I know people
Speaker 1: that work hard that don't have the money. I've made
Speaker 1: the decent sum of money I've had, been taken a
Speaker 1: giving pledge with the Warren Buffin Bill Gates. But to me,
Speaker 1: my reputation was paramount and I would spend whatever I
Speaker 1: had to spend to defend myself. But if you take
Speaker 1: a thirty year old kid or twenty five year old kids,
Speaker 1: he can't do it to the odds or I will fold,
Speaker 1: will give them the money, and that's what they bet on.
Speaker 1: I will tell you a little anecdotal story about five
Speaker 1: months ago an account major counting firm. That's how Price
Speaker 1: Waterhouse had a seminar in Palm Beach. I live in
Speaker 1: Boca Retard in six half months a year and basically
Speaker 1: the guest speaker was Mary Joe White, and I wanted
Speaker 1: to go because she was ahead of the SEC at
Speaker 1: the time my case was brought. And I walk over
Speaker 1: to her and I said, you're lucky, Ima, gentleman. I'm
Speaker 1: not going to attack in public, but I told who
Speaker 1: I was. You knew exactly who I was when I
Speaker 1: told her. Okay, says, here's a sealed envelope. In the
Speaker 1: envelope is a question. If you answer the question, I
Speaker 1: will give a hundred thousand dollars your favorite charity. She's
Speaker 1: I can't wait. What's the question? I said? When you
Speaker 1: originally and your staff originally after me, basically you asked
Speaker 1: for five of your bar admission of guilt at ten
Speaker 1: million dollar fine, and I refused. Five months later, with
Speaker 1: no new information on your part, your staff came back
Speaker 1: and said, okay, no admission of guilt meaning and no admit,
Speaker 1: no deny, no time out, and give us four point
Speaker 1: nine million. What did you learn between your first ask
Speaker 1: which destroyed the business because was totally unacceptable, and your
Speaker 1: second asked, which was if you first ask, I would
Speaker 1: have accepted to get rid of you. And a response
Speaker 1: was innocent people. She didn't say it was innocent. Innocent
Speaker 1: people often settled because the litigation cost and time demands
Speaker 1: are so much greater than the settlement course. Now I submit,
Speaker 1: that's a disgraceful situation. And what happens with these regulators
Speaker 1: is they bring a case with the hope of bringing
Speaker 1: down a high profile guy or gal, taking that accomplishment
Speaker 1: and getting themselves a job in the private actor as
Speaker 1: defense attorneys. When I told my attorney what MS White said,
Speaker 1: they say it's not a surprise because that the sec
Speaker 1: she was acting like a prosecutor. ASH is in private practice.
Speaker 1: He's talking like a defense attorney. And I don't think
Speaker 1: the way it should be. I think they should have
Speaker 1: sat down with me, understand all the answers. I could
Speaker 1: give a whole bunch of things. My son I was
Speaker 1: half his capital runs around a hedge fund. He was
Speaker 1: short the stock to day of the announcement, not long
Speaker 1: he lost money with stock. I didn't buy any stock myself.
Speaker 1: It was only brought in two accounts. But I don't
Speaker 1: want to. We could spend now and a half and
Speaker 1: all the facts. Huh. Quite fascinating. But it's a sad
Speaker 1: situation and hopefully there'll be some remediation make it better
Speaker 1: for the next person. But to specifically answer your question
Speaker 1: and for your youngster, and don't have a lot of money,
Speaker 1: you're out of business. Unbelievable. Let's talk a little bit
Speaker 1: about where we are in the state of the economy today.
Speaker 1: Um as a value investor, what do you think about
Speaker 1: markets here? I think the SMP five is recently adequately valued,
Speaker 1: fair value, fair value, fully value, fair value. Say what
Speaker 1: you want, um My, overriding theme is we're heading towards normalization.
Speaker 1: For the last seven or eight years, and even now
Speaker 1: to some degree, we're in that abnormal environment. What do
Speaker 1: I mean by that? There's nine trillion dollars of sovereign
Speaker 1: debt around the world that carries a negative interest rate,
Speaker 1: whereas you've got to pay the government to carry their debt.
Speaker 1: It's crazy, okay, and so we're heading to normalization. To me,
Speaker 1: normalization is the labor force grows about a half a
Speaker 1: one percent peratum. The productivity the labor force grows about
Speaker 1: one half percent peratum, so that's real growth about two
Speaker 1: Right now, we're growing, you know, three to four um.
Speaker 1: The inflation rate maybe two percent, So nominal GDP grows
Speaker 1: at four percent two percent real two percent inflation uh
Speaker 1: and in four percent nominally growing world, the Fed funds
Speaker 1: rate or to be two and after three, which will
Speaker 1: take you a year to get there. Currently I think
Speaker 1: one in three quarters or two uh, and the tenure
Speaker 1: government order to be close to four currently hovering under three.
Speaker 1: In that world, the SMP multiple should be I think
Speaker 1: about seventeen times, so seventeen times this year. We're using
Speaker 1: an estimate of a fifty eight six UM and seventeen
Speaker 1: times next years one sight, which by estimate at the
Speaker 1: preliminarily now is six and we're hovering in those areas.
Speaker 1: So I think the market is addequally valued. On the
Speaker 1: other hand, the conditions for a big decline are not present.
Speaker 1: The words beer markets don't emerge have a maculate conception.
Speaker 1: They come about for fundamental reasons, generally speaking. Number one,
Speaker 1: the stock market smells an oncoming recession. If anything, the
Speaker 1: economic data reads exempt opposite exactly. The second reason we
Speaker 1: have a beer market is the central bank gets to
Speaker 1: the market and the through aggressive tightening, turns it down down,
Speaker 1: and they've been moving very slow. I think that behind
Speaker 1: the eight bowl myself. Third is invested exuberance. And I
Speaker 1: would say if you look at the flow of funds
Speaker 1: out of ecuity funds into fixed income product, you know
Speaker 1: there's a few signs of exuberance. You know, an Amazon
Speaker 1: which could be justified by the fundamental growth, or a Tesla,
Speaker 1: which I don't think is justified. But you know by Lodge,
Speaker 1: you know the great line I only wish I coined it.
Speaker 1: I give him great credit all the time. Is John
Speaker 1: Templeton's beaux markets are born and pessimism, They grow on skepticism,
Speaker 1: they mature and optimism, and they die in euphoria. We
Speaker 1: clearly have optimism bio lodge, but we do not have
Speaker 1: any signs of euphoria. And the fourth thing is some
Speaker 1: kind of signal cause of a market is some significant
Speaker 1: geopolitical event which you can forecast. And certainly a lot
Speaker 1: going on in the world. It's very clear that you
Speaker 1: know what's going on with Russia and the Putin and Trump, etcetera.
Speaker 1: It's very complex. Let's let's talk about that a little bit.
Speaker 1: We have North time, I got in trouble talking about politics. Well,
Speaker 1: but let's talk about global events and politics. North Korea
Speaker 1: or I am rand has been saber rattling at and
Speaker 1: with both countries. Are either of those a legitimate threat
Speaker 1: to the market, Well, if something went wrong, I mean
Speaker 1: I think that the president, I think he's been the
Speaker 1: right track with North Korea, and I think he was
Speaker 1: on the right track with Iran. I think I never
Speaker 1: worried much about North Korea. The only concerned with North
Speaker 1: Korea is if rocketman launched a rocket that they lost
Speaker 1: control over and landing in the wrong place. But as
Speaker 1: long as the rockets land in the water and we're fine. Um,
Speaker 1: But no, these are potential risk. But you know, no
Speaker 1: one knew about the missile crisis, Kennedy Steel confrontation. You know,
Speaker 1: there are things in the geopolitical world that can go wrong.
Speaker 1: I mean, clear, we have a usual president um um,
Speaker 1: and I think we'll get a referendum about his policies
Speaker 1: in November, and it's not clear what to happened. And
Speaker 1: I myself, I'm conflicted and all honestly, what what about
Speaker 1: issues of tariffs and trade? Tariffs are wrong? And I
Speaker 1: think the market believes that they're wrong, and the market
Speaker 1: has been up until now generally complacent because what's happened
Speaker 1: is he's generally backed off on controversial policies and ultimately
Speaker 1: cave didn't listen to his advisers. You know, during the
Speaker 1: campaign he was very negative on NATO. Uh, Madness told
Speaker 1: him the NATO was important. So all of a sudden,
Speaker 1: NATO is important, you know, although there's been a lot
Speaker 1: of Joe boning about NATO and the less more on
Speaker 1: the expense side, the equabil carrying of expenses. Uh, what
Speaker 1: worries me, to be honest with you, is more the
Speaker 1: fiscal policy we're pursuing in the sense that you know,
Speaker 1: the unemployment rate is near full employment, um, and UH,
Speaker 1: the deficitor is not coming down. So I think that
Speaker 1: there's a good chance that not only is it not
Speaker 1: coming down, it's been exting. I think it's a good
Speaker 1: which is one of the reasons I decided to become
Speaker 1: a family office. You know, I lost money uh in
Speaker 1: two thousand eight personally, and I did a poor drop
Speaker 1: from my investors in inwo eight. I lost a lot
Speaker 1: of money. Market was down thirty seven percent that year.
Speaker 1: Less in the market, but I lost a lot of money.
Speaker 1: And the truth be known, I was less concerned about
Speaker 1: my own money, but very concerned about my investors money.
Speaker 1: I live a very simple life. I've been married fifty
Speaker 1: four years to say woman she toured for thirty five years.
Speaker 1: I don't collect art. Uh. Last time we spoke, you know,
Speaker 1: my my had one of the mobilits uh sixteen years old.
Speaker 1: I know I lectured you to go get a new
Speaker 1: car with blue Did you succeeded? I got a new
Speaker 1: car for the safety features, But I still have a
Speaker 1: two thousand two World Won't Bible that I drive and
Speaker 1: I like um. And so you know, I live a
Speaker 1: very simple life and I have no borrowings or own
Speaker 1: anybody a penny. But I cared about my investors because
Speaker 1: I let them down. And so uh, I am concerned
Speaker 1: about fiscal policy. The deficits should be coming down, not
Speaker 1: going up. The President is very very much, you know,
Speaker 1: promoting things for his base. Um. And if we're gonna
Speaker 1: buy American and you disregard the law of comparative advantage
Speaker 1: and we put on these tariffs, um, and the labor
Speaker 1: markets are tightening, and the price of what is growing up.
Speaker 1: I would think common sense suggests there should be an
Speaker 1: inflation surprise which will affect the FED, and they'll affect
Speaker 1: the market a little bit like what's happening with the
Speaker 1: Fang stocks. Now. You know, Facebook missed the number that
Speaker 1: decline and uses an all of a sudden, everybody thinks
Speaker 1: the world has come to an end for Fang, which
Speaker 1: I doubt no. But you're totally talking my book. With inflation.
Speaker 1: You look at this aluminum and steel tariffs and the
Speaker 1: automobile tariffs. That could be extreme wrong footed policy. But
Speaker 1: I think he's not wrong in saying we have to
Speaker 1: have a fairy game, and so maybe there'll be a
Speaker 1: compromise that will work out. You know, we we can't
Speaker 1: sell him short. He's the president country, and therefore he
Speaker 1: used the pilot of the airplane, and I always root
Speaker 1: for the pilot. I want to do well. I'm troubled
Speaker 1: about the environment. You know. I was privileged to have
Speaker 1: dinner with him in the White House in July of
Speaker 1: last year, and when it was only ten people in
Speaker 1: the president we sat down at the dinner table. He
Speaker 1: could have been more gracious. He said to me leave,
Speaker 1: you had great reputation. Do you think your open letter
Speaker 1: of President Obama created your SEC problems? So somebody had
Speaker 1: briefed him, and I told him. A lot of people
Speaker 1: say that I have no idea if it did or
Speaker 1: it didn't. All I know is that they basically ruined
Speaker 1: my business, and they did not conduct themselves in a
Speaker 1: proper manner. Uh Still, they refused to answer the question
Speaker 1: what did you learn between you first ask and your
Speaker 1: second ask? I sent two very polite letters to uh
Speaker 1: Jay Clayton, the head of the SEC. He did not
Speaker 1: respond to him. And when I encountered the Mary Joe
Speaker 1: White at this seminar and I promised a hunt a
Speaker 1: thousand dollars her favorite charity if she answered the question.
Speaker 1: She demured, and answer the question, I'd like to know
Speaker 1: what'd you learn? I don't. I don't think you can
Speaker 1: get an answer to that question, I think anytime soon.
Speaker 1: So if you so, currently you sound like you're fairly
Speaker 1: constructive about the market. Are you more or less fully
Speaker 1: invested or or what? Pretty much? But I have a
Speaker 1: unique problem now in the sense that by becoming a
Speaker 1: family office, about forty of the money is that client
Speaker 1: money and have a legal obligation to return their money.
Speaker 1: So between now and the end of the year, I'm
Speaker 1: not buying anything, basically selling uh and hopefully intelligently, and
Speaker 1: hopefully the market is higher at the end of the
Speaker 1: year than it is now. And I so I had
Speaker 1: a good prices and then I revert to a family
Speaker 1: office and I get the SMP five off my back.
Speaker 1: So hypothetically, let's say your views change. You mentioned nine.
Speaker 1: Let's say it's two years hence and you you're saying, hey,
Speaker 1: I really smell something bad coming. How would you adjust
Speaker 1: your portfolio then, and how would that be different from
Speaker 1: when you were running client money? Uh? It wouldn't be
Speaker 1: the only different, and it's a significant difference is I
Speaker 1: would be willing to buy buy into more liquid things
Speaker 1: that I felt the value. We're outstanding because I didn't
Speaker 1: have to worry about quarterly redemptions, so you could hold
Speaker 1: it longer term. You could be early and not worry
Speaker 1: about screaming clients exactly. You don't have that bugaboo of
Speaker 1: running after the SMP and outperforming, and I would try
Speaker 1: to invest more for long term capital gains. I'm not
Speaker 1: sure what year it was, but thirty odd years ago
Speaker 1: Warren Buffett had in his annual report an example of
Speaker 1: a money manager who every year brought that year's hot stock,
Speaker 1: made fift sold it, and invested next year's hot stock,
Speaker 1: compared to basically buying a fifteen percent grow of that
Speaker 1: compound in the fifteen percent every year. After thirty or
Speaker 1: forty years, you have thousands of times more money after texts.
Speaker 1: And that's what I constantly say. You know, Warren is
Speaker 1: a phenomenon in his own right, but people thought give
Speaker 1: adequate credit his record half attacks is truly unbelievable. You're
Speaker 1: not giving up thirty in short term capital gains and
Speaker 1: then letting that compound over decades. I would hope that,
Speaker 1: say seventy what I do would be oriented towards long
Speaker 1: term capital gains twenty five percent. Maybe short term where
Speaker 1: we think we have a d variant perception, etcetera. But
Speaker 1: I'd like to invest for long term capital gains. And uh,
Speaker 1: I'm gonna have a different fee structure um, and I'm
Speaker 1: a different approach the way I've run my fund, which
Speaker 1: is why my people turnover has been very nominal even
Speaker 1: during this sec period. Very nominal is I tell the people,
Speaker 1: if you make money for the investors, you get paid
Speaker 1: no matter what. So I accepted a big netting risk.
Speaker 1: There was any one year, you know, if like energies
Speaker 1: had a favor energy guy might lose money if you
Speaker 1: didn't get it right, and you are the people might
Speaker 1: make money. So I paid the people that made money.
Speaker 1: I didn't get a check back from the guy or
Speaker 1: the gall that lost money. So I had a big
Speaker 1: netting risk. And in the new business I said, I'm
Speaker 1: not gonna accept the netting risk. The families gonna put
Speaker 1: ten percent of the profits above three percent in the
Speaker 1: pool to be shared by the twelve or fifteen people.
Speaker 1: And so We're all going to be in this together.
Speaker 1: Can you stick around a little bit. I have some
Speaker 1: more questions for it. Absolutely, we've been speaking with Lee
Speaker 1: Cooperman of Omega Advisors. If you enjoy this conversation, be
Speaker 1: sure and come back for the podcast extras. Will we
Speaker 1: keep the tape rolling and continue discussing all things value investing.
Speaker 1: We love your comments, feedback, end suggestions right to us
Speaker 1: at m IB podcast at Bloomberg dot net. You could
Speaker 1: follow my daily column on Bloomberg dot com. Check me
Speaker 1: out on Twitter at rit Halts. I'm Barry Hults. You're
Speaker 1: listening to Masters in Business on Bloomberg Radio. Welcome to
Speaker 1: the podcast leaf. Thank you some for doing this again.
Speaker 1: I've been looking forward to um having a conversation. I
Speaker 1: still have a ton more questions. I didn't get to
Speaker 1: talk about the Giving Pledge or your philanthropy, and you
Speaker 1: told a wonderful story. I don't even believe it was
Speaker 1: on on air the last time. The Giving Pledge is
Speaker 1: warm buffing and Bill gates the commitment from people to
Speaker 1: give away the majority of their assets technically half half. Well,
Speaker 1: I've told I'm gonna say sold Warren. You know I
Speaker 1: was on TV a competitive network the other day, and
Speaker 1: Warren sent me a very nice uh email which he
Speaker 1: gave the fellow at the other network up at the
Speaker 1: approval to read, and I'm trying to pump around and
Speaker 1: find it. He says, highly. You were terrific on X
Speaker 1: y Z. You can say CNBC today. I think I
Speaker 1: know exactly emotions you experienced the reason you followed, since
Speaker 1: I have done somewhat the same thing in nineteen nine.
Speaker 1: The one thing I can guarantee you is that your
Speaker 1: parents would be extraordinarily pleased at the course you're followed,
Speaker 1: and I're going to continue following life. Example can be
Speaker 1: powerful at the giving pledge. We have disproportionately a low
Speaker 1: number of people who have made their fortunes in Wall Street.
Speaker 1: You can be a powerful influence in having them rethink
Speaker 1: their priorities. Hope you make use of the moral podium
Speaker 1: on which you stand. I agree with you that I
Speaker 1: didn't ask for enough when I called on you to pledge,
Speaker 1: and I'm glad you're correcting him form ere. I told
Speaker 1: my plan to give it all the way you also
Speaker 1: you also told the charming story about dinner with Buffett
Speaker 1: Gates and a bunch of other partists, Mike Bloomberg, Reenforcement,
Speaker 1: who's deceased, John Poulson. I was the poorest guy that
Speaker 1: that's the joke you said, is the poorest guy at
Speaker 1: the table. I've lived the American dream. Who picked up
Speaker 1: the bill for that? The mayor? It wasn't you in
Speaker 1: the philothropic, it was in philanthropical officers. I mean, he
Speaker 1: just terrific guy. And uh, you know, basically, look, I
Speaker 1: figured out a long time ago there's only four things
Speaker 1: you can do with money. When you think about it.
Speaker 1: The first thing you can do with money is you
Speaker 1: spend it on yourself. I mentioned before my wife has
Speaker 1: worked for thirty or five years as an educator. I
Speaker 1: don't collect art. I worked very long hours by design,
Speaker 1: and so I'm not a consumer. I'm not a closed
Speaker 1: horse for obvious reasons that people they can't see me.
Speaker 1: I'm on radio. But you know I'm a chubby guy.
Speaker 1: So you know, um, I can't consume what I used
Speaker 1: to make. I don't make any money anymore because the
Speaker 1: SEC took care cooking my business. So the first thing
Speaker 1: you can do is spend it on yourself. I'm not
Speaker 1: a consumer. I happen to think that material possessions bring
Speaker 1: with them aggravation. So I like that. I think less
Speaker 1: is more. That's just my own view. Second think you
Speaker 1: do is you give you money to kids. But I
Speaker 1: think anybody who gives, if they have a lot of money,
Speaker 1: give all your money to kids is wrong, which is
Speaker 1: that deprives them of self achievement for sure. And you know,
Speaker 1: you look at what happens to lottery winners and sports.
Speaker 1: So I want to leave not not how kids get
Speaker 1: some money, but not not nothing remotely approaching what I have.
Speaker 1: The third thing you can do is you give it
Speaker 1: the government, but only a full gives the government money
Speaker 1: you don't have to give him. And the four thing
Speaker 1: is you recycle it back in society. And that's what
Speaker 1: my family and I have decided to do. My signature
Speaker 1: have a lot of things I'm doing, but my signature
Speaker 1: event is called Kopman College scholars If you live in
Speaker 1: s s Canton, New Jersey, UM and you show the initiative,
Speaker 1: enroll in a free three week pre college program designed
Speaker 1: by Frankly and Marshall. You're academically qualified. I'm big on
Speaker 1: equal opportunities, not on equal outcomes, and you have financial
Speaker 1: need I'm met by government. I give these kids up
Speaker 1: at ten thousand dollars a year for six years to
Speaker 1: get college degree. And it's life changing, very emotional. But no,
Speaker 1: you've been doing this every year for I'm in my
Speaker 1: fourth year. I put twenty five million dollars in a
Speaker 1: fund and there's enough money to send five minty kids
Speaker 1: to college. I told the guys at the sec for
Speaker 1: what your cost to me, I could go to kids.
Speaker 1: They didn't see him to the care and so this
Speaker 1: is life changing and it's impoor to me. Uh. It's
Speaker 1: called Cookman College College. And I have other things I
Speaker 1: do in the Jewish world. I've done a lot talking
Speaker 1: about Birthright. Weren't you in earl Un fund where I
Speaker 1: send a bunch of busloads kids to Birthright Israel. I
Speaker 1: subsidized Jewish summit camps. My granddaughter and my daughter in law,
Speaker 1: Jody Uh preside over request from mits for money Uh
Speaker 1: to for Barbot Mitzpah's. I did a major wing the
Speaker 1: same bottom as medical center, which I got more than
Speaker 1: I bargained for, and I said, this is a dedication.
Speaker 1: They asked you for number. I gave the number, and
Speaker 1: when I looked with a built was fabulous, like a
Speaker 1: hundred forty yard private rooms, fifty neon NATO centers. My
Speaker 1: name is on the building. I get more credit than
Speaker 1: I deserve. I feel blessed to be in the position
Speaker 1: to give it away. And it wasn't all that way,
Speaker 1: as I set to Warren Buffing, Bill Gates, and Mike
Speaker 1: Bloomberg on the fist. First generation born in America, my family,
Speaker 1: first generation go to college upen to Columbia. All my
Speaker 1: education was public school base. I went public grade school
Speaker 1: in the Bronx. I went to public high school in
Speaker 1: the Bronx. I followed the advice of Harley Schoolly, I
Speaker 1: went west and I went to college in the West
Speaker 1: Bronx Hunter Colleges and now called called Lieman College. And
Speaker 1: then I had a short sixteen months stay at Columbia,
Speaker 1: which opened the door to Goldman Sachs. Because Goldman probably
Speaker 1: hiring at someone out of a mold, wouldn't hire out
Speaker 1: of city university and the NBA. Columbia got me in
Speaker 1: the goldment. I started my career. I mean, I got
Speaker 1: my MBA on January thirty one, sixty seven. Had a
Speaker 1: six month old kid who was now approaching fifty one,
Speaker 1: I had no money in the bank. Uh and um
Speaker 1: I had a student loan to repay. So by definition
Speaker 1: how negative net worth? So I didn't I couldn't take
Speaker 1: the next vacation at that time. I think they were
Speaker 1: going to Mexico. Now they go to Australia. And I
Speaker 1: went to work at Goldman the very next day. And
Speaker 1: I started my career with negative net worth, made a
Speaker 1: lot of money and taking the giving pledge with Buffett
Speaker 1: and you know, I mean I liked the ark of
Speaker 1: my life. I feel good about things and uh, but
Speaker 1: I do a lot of people that worked hard, it
Speaker 1: didn't make it, you know. So I was lucky. I
Speaker 1: went to a firm whose name didn't change. You know,
Speaker 1: you could have gone a good body, could have gone
Speaker 1: the Kidney Peabody. You could have gone the Coon Lobe.
Speaker 1: You could have gone to you know, um Low Roads. Uh.
Speaker 1: Instead I went to go home in Sacks. Uh. That
Speaker 1: was a good decision. So I deserved some credit for
Speaker 1: making a good decision because it wasn't the best financial offer.
Speaker 1: I had. The best decision I made in my life
Speaker 1: was I went to down school. Okay, back in the sixties,
Speaker 1: if you finished your major minor in college in three years.
Speaker 1: They will allow you to count your first year of
Speaker 1: dental medical school towards a fourth year of college in
Speaker 1: a separate degree. So I toiled very hard in the
Speaker 1: summer of nineteen sixty three and took physical chemistry at
Speaker 1: the University of Pennsylvania. It was my major was chemistry.
Speaker 1: My mind was math and physics. And I I enrolled
Speaker 1: in August of sixty three in the University of Pennsylvania
Speaker 1: Down School. And after eight days I developed a concern
Speaker 1: that I was pushing myself in the direction that I
Speaker 1: wasn't fully committed to. And it is traumatic. My father
Speaker 1: may rest in peace, was pissed this hell at me
Speaker 1: because you know, I paid tuition for a year. I
Speaker 1: paid room and board. Uh. The dean of the Down
Speaker 1: School put me on a guilt trip. He said, you
Speaker 1: took the hunting first applicant. You deprived him of the
Speaker 1: dental education. My dad was going around talking about my
Speaker 1: son the dentist, and uh, it was very traumatic. Was
Speaker 1: the best decision I've ever made. And so you know,
Speaker 1: life is partly making good decisions both so a lot
Speaker 1: of luck. Let's talk a little bit about Columbia where
Speaker 1: you got your m b A. You had some fairly
Speaker 1: interesting colleagues that you hung out with them. Yeah. Well,
Speaker 1: two of my best friends to this day I met
Speaker 1: at Columbia, married Ga Belly and Art Sandberg. And what
Speaker 1: Columbia did is it gave me the language of business
Speaker 1: with accounting, operations, research statistics, what have you. Uh. It
Speaker 1: gave me three initials after the end of my name
Speaker 1: that I kept for the rest of my life. And
Speaker 1: it gave me a bunch of relationships that went out
Speaker 1: into the business world where you could work in the
Speaker 1: future with relationships. I made friendships that I kept for
Speaker 1: the rest of my life. And that's what life is
Speaker 1: all about. That that must have been some car communing
Speaker 1: back and forth to time he did it. I may
Speaker 1: find his recommendation record lectures. Mario and I and Art
Speaker 1: had the same stockbroker. I think he's I'm sure he's
Speaker 1: deceased high fishman. Uh and Mary and I used to
Speaker 1: push each other, jostly each other to get into the
Speaker 1: one phone booth at the business school to broker to
Speaker 1: put in order in But it was good. You know,
Speaker 1: I love Mario because you know, the only thing has
Speaker 1: changed about Mary in the last fifty years of the
Speaker 1: color of his hair. He has the same physique he
Speaker 1: had when he was in Busines school. I wish I
Speaker 1: could say the same. He's a good friend, terrific human being,
Speaker 1: and his heads, his hairs gone from red to white,
Speaker 1: but he has it all. So so you mentioned, um,
Speaker 1: some of the philanthropy you've done with sending some kids
Speaker 1: from from New Jersey to college. Um, you talked about
Speaker 1: one of the buildings you endowed in one of the hospitals,
Speaker 1: and bottom, let's talk a little about Columbia because you
Speaker 1: set up multiple scholarships. What else have you done with
Speaker 1: Colombia and how do you see that manifest given him? Uh,
Speaker 1: I think come to over thirty million dollars towards the
Speaker 1: building and data share their economics and finance. I've given
Speaker 1: a similar amount of money to Hunt the college. You know,
Speaker 1: the truth of the matter is Columbia is more aggressive
Speaker 1: and asking. They're both worthy causes when you think about it.
Speaker 1: I I went to Hunter for twenty four dollars a semester.
Speaker 1: I met my wife my sophomore year and we married
Speaker 1: fifty four years. So somebody gave your wife in a
Speaker 1: top education for virtually nothing yo, and today I think
Speaker 1: the tuitions about six thousand dollars a year. So I
Speaker 1: gave them aid a financial aid uh at thet at
Speaker 1: Hunter and they needed some help in a library, So
Speaker 1: in data library. My name is in a lot of things,
Speaker 1: but that's secondary to me. I don't care about the
Speaker 1: highest form of giving his anonymous. So whoever is in
Speaker 1: Hunter College alumni office, you should reach out to leave.
Speaker 1: They have to have to have of giving up a
Speaker 1: thirty million dollars. They tapped me out. I give and
Speaker 1: I give Jennifer rab the president Hunter, all the credit.
Speaker 1: When she called me up, I said, you've got a
Speaker 1: problem in dealing with me. Whis what's the problem? I said,
Speaker 1: I never stepped foot and Hunt the college. I went
Speaker 1: to Hunter in the Bronx. Hunter in the Bronx today
Speaker 1: is called Lehman College. Is at the end of the
Speaker 1: Korean War, Hunter and the Bronx when co ed because
Speaker 1: it was inadequate capacity, and the colleges who absorbed the
Speaker 1: returning g i's and so I went to Hunter in
Speaker 1: the Bronx and she was very sharp. He says, pull
Speaker 1: out your diploma and look at your diploma. What did
Speaker 1: you say to college. So she got me for a
Speaker 1: lot of money that I'm happy to be in a
Speaker 1: position to do it. My granddaughter, one of my my
Speaker 1: youngest granddaughter says, Pop, everybody who asked you for money,
Speaker 1: you give them money. I said, money is like the
Speaker 1: new are supposed to be spread around. Well, we'll speak
Speaker 1: after the interview, will have a conversation about that. Also, UM,
Speaker 1: let's let's jump to some of my favorite, uh, some
Speaker 1: of my favorite questions. I'm just looking through all my
Speaker 1: notes to see what I missed, because we bounced all
Speaker 1: over before. There was one question I had circled to
Speaker 1: have I had wanted to ask you. Oh, here it
Speaker 1: is so you and and certainly Columbia must have influenced
Speaker 1: you this way. You're you're known as a value investor,
Speaker 1: UM and and uh some of the greatest value investors
Speaker 1: of all time have come out of Columbia Business School.
Speaker 1: The past couple of years, value has been lagging growth dramatically,
Speaker 1: As it often does. Over long periods of time, value
Speaker 1: beats growth, but over short periods of time sometime growth dominates.
Speaker 1: How do you deal with that when you're running a
Speaker 1: fund and you have quarterly UM letters to put out
Speaker 1: and quarterly responses a client's when what you know works
Speaker 1: over the long term is lagging over the short time.
Speaker 1: I would just point what is value? What is growth?
Speaker 1: My largest position my fund is Google. You know, I
Speaker 1: would say Google is growth. It's not growth, but it's
Speaker 1: not an expensive value Google. When I bought it was
Speaker 1: on the twenty times earnings, you know, growing at twenty
Speaker 1: percent a year with an unbelievably fortress balance sheet, tremendous company.
Speaker 1: You know, Um, that's not that's not it's growth, but
Speaker 1: it's value at a reasonable price. Warren Buffett were the
Speaker 1: great value investors of all time. Is correctly sort of
Speaker 1: value in Apple. So uh, you know, Uh, I try
Speaker 1: to resist labels. I would I want to be value oriented,
Speaker 1: but it could be a growth company. Uh. And I
Speaker 1: take him each one at a time. And the way
Speaker 1: I run the firm is, you know, the analysts proposed
Speaker 1: and I dispose, so a position that I have a
Speaker 1: decent sized position. Something called a MC Media. Uh. Simbos
Speaker 1: a m c XUM cable channel and movie. They owned
Speaker 1: The Walking Dead and things like that, and the Dolan
Speaker 1: family owned seventeen percent of the economic interests of the company.
Speaker 1: And because own cable Vision and oh they sign what
Speaker 1: about MSG and the ins is they still own that's
Speaker 1: the Jimmy Dolan, that's his prize son the Sun. So anyway,
Speaker 1: getting back to a m c X so, seventhea Be said,
Speaker 1: the economic interest is owned by the Dolan family because
Speaker 1: it's an A stock and the BE stock, and they
Speaker 1: have the BE stock. They own sixty to the vote.
Speaker 1: So anybody owns sixty percent of the vote is not
Speaker 1: doing things to entrench themselves. What they do is they
Speaker 1: with a seventy percent economic interests. They're doing what they
Speaker 1: think is economically sensible. Well, if you look the last
Speaker 1: two years, every quarter, like Clockwort, they brought back fifty
Speaker 1: to hard million dollars to stock. Every quarter they paid
Speaker 1: between the like very high forties up until sixty. I
Speaker 1: pay attention to that, and when a sent owners buying
Speaker 1: significant amount of stock. Now I happened to think the
Speaker 1: industry is consolidating and I wouldn't be surprised if somebody
Speaker 1: brought this company and uh, the private market value probably
Speaker 1: approaches eighty another one, so I would call that value.
Speaker 1: But they're growing the business. The earnings in the last
Speaker 1: two quarters substantial exceeded Wall Street expectations. Another one that
Speaker 1: just had a good quarter. But I wouldn't qute a
Speaker 1: growth company. We'll grow in line with GDP. The United Airlines.
Speaker 1: United air Lines is brought back over the stock in
Speaker 1: the last three years. Wow, that's a lot. Yeah, market
Speaker 1: straining and seventeen times earnings and this thing is training
Speaker 1: it out eight eight and a half times earnings with
Speaker 1: a big buy back in place, and they're on record.
Speaker 1: Is I think we're talking eight ten, twelve and for
Speaker 1: all in tents of purposes, they're agreeing with that progression.
Speaker 1: And the twelve dollars we're using assumes very modest buy back.
Speaker 1: Giving the paste to buying back. They probably earned over
Speaker 1: thirteen um. And the stock is uh, you know, and
Speaker 1: think the last night check was about eight dollars. So
Speaker 1: you don't limit yourself to anyone sector. We're very eclectic.
Speaker 1: We're very eclectic. It's growth in a reasonable price, and
Speaker 1: I have no problem with growth as long as the price.
Speaker 1: You know, I if I listened to my analysts, I
Speaker 1: would be making more money. He's been very bullish on Amazon,
Speaker 1: but you know, the multiple scares me off. There was
Speaker 1: a very unique special company had a great quarter this year,
Speaker 1: very good quarter. We own Amazon, we owned a Facebook,
Speaker 1: smaller amount, we owned Adobe, we own a Google. Um
Speaker 1: so let's let's talk about Facebook for a second. That
Speaker 1: they got and I want to get your thoughts on
Speaker 1: how a manager and a trader response to something like
Speaker 1: their quarter that their numbers were disappointing their subscription. Um.
Speaker 1: I reduced a position response to the number, to be
Speaker 1: honest with you, but I had after the fact. After
Speaker 1: the fact, my course is still well below the card market.
Speaker 1: I have an extra incentive, Like I said, I gotta
Speaker 1: return a bunch of money to the investors. And if
Speaker 1: something not gonna work for a while, I might be
Speaker 1: more prone to selling. So you you have a short
Speaker 1: term hard stop at the end of the year. But
Speaker 1: I have to give back cast In two thousand and eight,
Speaker 1: when a lot of hedge ones were closing up in
Speaker 1: gating Capital. Most people won't remember this, my picture was
Speaker 1: in the newspaper New York Times, and under the cap
Speaker 1: my picture was a caption, they have to load me
Speaker 1: into my grade before I would gate capital, not on
Speaker 1: a high water more. So, you know, I have to
Speaker 1: give the back, not in kind. They're gonna get back
Speaker 1: on her, but set in cash, and I'm gonna position
Speaker 1: to do it because a big chunk of my manage
Speaker 1: the GP capital. But I have to make a lot
Speaker 1: of sales. So let's assume it wasn't you didn't have
Speaker 1: the hard stop coming December thirty one. As a trader
Speaker 1: and a manager, how do you look at a stock
Speaker 1: that takes a haircut? Do you think the fund Is
Speaker 1: this a question of the fundamental story changing or just
Speaker 1: from a risk management perspective, you're gonna take a little
Speaker 1: off the table. From a risk managing perspective, I took
Speaker 1: something off the table. My guess is it's a cup
Speaker 1: that they have virtual future growth ahead of them. But
Speaker 1: you know, in the world of technology, somebody's innovation and
Speaker 1: somebody's obsolescence, and there was a decline and a number
Speaker 1: of users, and you know, maybe there's something changing. So
Speaker 1: you control risk by diversification, You control risk by position size,
Speaker 1: You control risk by the financial characteristics of the company
Speaker 1: you own. In the words your own fifty multiple stocks,
Speaker 1: the own twelve multiple stocks, And I would say that
Speaker 1: uh an amc X, which I sited, or United Airlines
Speaker 1: when you have big buy backs and large amounts of
Speaker 1: free catch flow and way below market multiples. You have
Speaker 1: an element of protection, and that's where I feel most comfortable.
Speaker 1: So I'd have concentrated bets, but in things that I
Speaker 1: perceived to be less risk here. So let's let's jump
Speaker 1: to some of my favorite questions. And I know only
Speaker 1: have you for a finite amount of time today, um
Speaker 1: tell us the most important thing that most people don't
Speaker 1: know about you. I think my life has been an
Speaker 1: open book. Let me just tell you what I think
Speaker 1: the most important thing I tell the kids, and I
Speaker 1: meet with a lot of kids, and I tell them
Speaker 1: the one thing it's most important, no matter how rich
Speaker 1: you are, the one luxury you cannot afford his arrogance.
Speaker 1: Be nice to people, be a good friend, be available.
Speaker 1: That's that's that's what I tell them. So I think
Speaker 1: people know about me. So you mentioned some of your
Speaker 1: early mentors in passing. Who were the people who helped
Speaker 1: form your your career and your worldview? It's hard to
Speaker 1: select one? Give us multiple Yeah. Well, I have an
Speaker 1: enormous respect for ken Land. I've said this publicly previously.
Speaker 1: I learned a lot from Bob Manusian, who was the
Speaker 1: head of trading at Goldman and my trading instincts emanating
Speaker 1: part from his wisdom. Very smart man. He's I think
Speaker 1: he's probably eighty something now. I speak with him frequently.
Speaker 1: On the industrial side. I visited twice a year for
Speaker 1: twenty five years with Dr Henry Singleton, the founder, and
Speaker 1: the man was in a class by himself, absolutely brilliant.
Speaker 1: Never got the recognition he deserved. Uh, and I tried
Speaker 1: to change that. I wrote a case study for Harvard
Speaker 1: on him. And there was a professor and a junct
Speaker 1: professor who wrote a book called The Outsiders and featured Singleton,
Speaker 1: which brought recognition to him. John Whitehead, John Weinberg, but
Speaker 1: co senior partners of Goldman, a bunch of people, my parents.
Speaker 1: You know. My father was a good influence on me.
Speaker 1: So that's who the folks who helped form and shape
Speaker 1: your career, who impacted the way you think about investing?
Speaker 1: What what Roger Murray, who was the professor and security
Speaker 1: analysis he's long gone unfortunately, Um just reading and what
Speaker 1: have you. But I said, Roger Murray was my professor
Speaker 1: and security analysis. Unique guy. He was an adjunct professor.
Speaker 1: He also ran college or time and equities fund and
Speaker 1: very very very good man. When when you say reading,
Speaker 1: you read more financial literature than anybody. You know, you're
Speaker 1: not necessarily sitting down with books, but you're looking at
Speaker 1: annual reports and that sort of stuff. Yes, yeah, you know,
Speaker 1: and I'm reading all the reports of my analysts. Keep
Speaker 1: me very busy. I don't read a lot of novels.
Speaker 1: I did read two good books I enjoyed recently, well
Speaker 1: one again they're financially oriented that I read. Uh. I
Speaker 1: love Capitalism by Ken Langne and I love Capitalism by
Speaker 1: It's a great read and it was very meaningful to
Speaker 1: me because you know, Ken's dad was a plumber in
Speaker 1: Long Island. My dad was a plumber you mentioned in
Speaker 1: the Bronx, and he had a paragraph from the book
Speaker 1: where he said his older brother typed invoices for his
Speaker 1: dad monthly on a Smith Corona typewriter. And I typed
Speaker 1: invoices along with my older brother on an underwood typewriter
Speaker 1: for my dad who was a plumber. In the Bronx,
Speaker 1: But you know, Kenn is self made, has not forgotten
Speaker 1: where he's come from, is extraordinarily generous and has a
Speaker 1: value system that I just totally relate to and he
Speaker 1: was to off a guy and uh, he said, two books.
Speaker 1: That's one I love, and the other one was Scott
Speaker 1: Watton's book. I enjoyed reading what's the name of that?
Speaker 1: Something to do the Wolves of Wall Streets. Oh sure, absolutely,
Speaker 1: that sounds like a fun book, good book. So what
Speaker 1: really excites you right now? What do you excites me?
Speaker 1: Frankly is seeing my kids and my grandkids grow old
Speaker 1: purposely with purpose, and health with health. But on the
Speaker 1: business side, I get excited by finding something somebody doesn't see,
Speaker 1: making a bet and having Mr Market proved me right,
Speaker 1: if not for the greed which the money is all
Speaker 1: going going to go back to this system. But that's
Speaker 1: what I do. I excited about finding things that people
Speaker 1: don't see and making a bet. And I just recently
Speaker 1: made a very large bet and an obscure company on
Speaker 1: time will tell whether it pays out, and I like
Speaker 1: like nobody owns it, nobody knows in about it. The
Speaker 1: second largest producer vanadium in the world, it's called Logo
Speaker 1: resource vanadium. Native vanadium is an alloy used in steel
Speaker 1: to strengthen the steel and the Chinese and mandated the
Speaker 1: need for improvement the quality of the steel. Well, they've
Speaker 1: had some disasters and the construct big construction project that
Speaker 1: there's increase in demand for an eighty with an aim
Speaker 1: also was used in the grids to strengthen the grid. Okay,
Speaker 1: van at um a year ago was four dollars a pound.
Speaker 1: It's currently hovering between eighteen and nineteen a pound. And
Speaker 1: there's been a big explosion and their revues and their earnings.
Speaker 1: And we have a consultant that we use who's an
Speaker 1: expert on vanadium, and he thinks the pricing going to
Speaker 1: the mid twenties. So they're gonna come to the stock price.
Speaker 1: I think the stock will probably worth three or four
Speaker 1: times were strady for but expeculative. You know, you're not
Speaker 1: dealing with a multi commodity company, dealing with one commodity
Speaker 1: but eight one mine. It's binary. Either it works or
Speaker 1: it doesn't. So far it's worked. I started at a
Speaker 1: forty cents and then as last I checked, there's two
Speaker 1: dollars and a few pennies. This company, it's called Logo
Speaker 1: Resource is larger Resources. Well, forty cents is a good. Uh, Well,
Speaker 1: what happened? There was a hedge fund. I won't mention
Speaker 1: that was going out of business and then they would
Speaker 1: liquid aiding. And uh, a good friend brought it the
Speaker 1: opportunity to my attention, and my friend and I split
Speaker 1: the ten million share block equally. It was much too
Speaker 1: small for Omega time the capital structure. That caught me
Speaker 1: with less than two million, and we bought the block
Speaker 1: at forty cents. And uh, it's not like two dollars
Speaker 1: and in some respects to better buy now than it
Speaker 1: was then because given the level of the price level
Speaker 1: of an adium, this will be a debt free company
Speaker 1: by the end of next year, and we'll probably generate
Speaker 1: over a billion dollars in cash if the vanadium price
Speaker 1: stays here over the next couple of years. That's crazy
Speaker 1: and a little bit outside of your usual uh sweet spot.
Speaker 1: Yeah yeah, but you you like that. You like it
Speaker 1: for the for the thrill um and the and the
Speaker 1: profit potential. What changes are you looking forward to, um
Speaker 1: now that you're gonna be running the family office, absolute
Speaker 1: return manager. Maybe get into the gym to deal with
Speaker 1: my weight. Sleep a little bit later. It's interesting when
Speaker 1: I'm dad in Florida, I see when I'm in Short Hills,
Speaker 1: New Jersey, I get in very early in the morning.
Speaker 1: Not because I want to get in at six forty
Speaker 1: in the morning, but the traffic. So I leave my
Speaker 1: house at five forty five. I walk in the office
Speaker 1: at six. In Florida, I had my battle with New York.
Speaker 1: They recognized my home office being legitimate. It is a
Speaker 1: real office. And I'm in my office in one minute.
Speaker 1: So I saved two hours and nineteen minutes. But get
Speaker 1: there more than six months a year, past seven months.
Speaker 1: I love. Nothing to do with taxes. It's the commute
Speaker 1: that us me nuts. Nothing to do with taxes. But
Speaker 1: I saved two hours of nineteen minutes a day. And
Speaker 1: if I want to read research and read research. If
Speaker 1: I want to go to the gym, I go to
Speaker 1: the gym. I want to sleep a little bit later,
Speaker 1: sleep a little bit later. But you know I ken
Speaker 1: Lan Going says it well. He imagines own money when
Speaker 1: he looks in them in the mirror in the morning.
Speaker 1: He knows who's to blame and who to credit. So
Speaker 1: this is it. It's gonna be my deal, and uh,
Speaker 1: I'm happy about it. I love my investors. Let me
Speaker 1: tell you, my investors are very, very loyal. The majority
Speaker 1: of the individuals were uh, you know, they stayed with
Speaker 1: me at a time when the sc was making accusations
Speaker 1: and they stayed with me. Most of the institutions pulled out.
Speaker 1: They used fiduciaries that don't want to use common sense.
Speaker 1: You invite them in willingness to answer all your questions
Speaker 1: and they basically their own boil coming in. They just
Speaker 1: fire you. But whatever, that's the life. It is what
Speaker 1: it is, right, that's what it is. So tell us
Speaker 1: about a time you failed and what you learned from
Speaker 1: the experience. Well, my biggest mistake, uh was basically put
Speaker 1: a lot of money into the vouchers were as a
Speaker 1: bijon privatizing. And what's the mistake. I bet on an
Speaker 1: employee that broke the law, you know. So I don't
Speaker 1: know what what I do differently, maybe not make the investment,
Speaker 1: but it was an employee. They was the most profitable
Speaker 1: guy that we had at the firm at the time.
Speaker 1: He was heads over heels of the investment and he
Speaker 1: basically was an unequivocal advocate for the investment. We met
Speaker 1: with the president of country who invited us in to
Speaker 1: make the investment. We had done also a due diligence
Speaker 1: but I did not know is my employee was aware
Speaker 1: of wrongdoing which you didn't disclose, And so I don't
Speaker 1: know what you say. You do it all over again,
Speaker 1: But maybe I just say I wouldn't have invested in
Speaker 1: that country. And then again, you know amazing after were
Speaker 1: discovered there was a corrupt regime running the country. I
Speaker 1: get a letter from when government agency encouraged me to
Speaker 1: invest the ass a vision. It's like one department has
Speaker 1: know what the other department is doing. World screwed up.
Speaker 1: So this is a question. I'm not sure how are
Speaker 1: you going to answer, or even if you can answer,
Speaker 1: other than say work, what do you do for fun?
Speaker 1: I walk with my older brother, have a very close
Speaker 1: relationship my brothers eight two. Um, I just said, I walk,
Speaker 1: and I read research, and I try to spend as
Speaker 1: much time with my grandkid as I can. I'm a
Speaker 1: very simple guy, you know, not multidimensional. Uh. If if
Speaker 1: a millennial or a recent college graduate came up to
Speaker 1: you and and said they were I'm not sure what
Speaker 1: to do with their career, what sort of advice would
Speaker 1: you give them? I just have do not go into
Speaker 1: a field for money. You know a lot of people
Speaker 1: romanticize hedge funds. Go into a field where you have
Speaker 1: an aptitude and you have an interest. You know, Warren,
Speaker 1: the different smart people have said it differently. Warren Buffers
Speaker 1: has got to work for people you admired, respect, tap,
Speaker 1: dance to work, and everyone will take care of itself.
Speaker 1: I agree with that. Henry Ford said, Uh, you know,
Speaker 1: don't think about money, you know, just do do what
Speaker 1: you love. Love what you do, You're bound to be successful.
Speaker 1: So find your gift in life and pursue that gift.
Speaker 1: And that's kind of what I advocate. And our final question,
Speaker 1: what is it that you know about the world of
Speaker 1: investing today that you wish you knew forty plus years
Speaker 1: ago when you were first beginning. Uh, it's a good question.
Speaker 1: I have to think about that. When I don't have
Speaker 1: you a good answer, I know more today that I
Speaker 1: know forty years ago. I've learned if something is too
Speaker 1: good to be true, it's not true. I've learned when
Speaker 1: everybody is on the same side of the boat, it's wrong.
Speaker 1: So you know, when everybody is talking about one stock
Speaker 1: and everybody's in that stock, generally something happens to go
Speaker 1: it was wrong and they're not right all the same
Speaker 1: time and the same thing when everybody in Wall Street
Speaker 1: is bullish and the same side of the boat be wary.
Speaker 1: So if our memory this is a memory. I didn't
Speaker 1: anticipate this question in twenty seventeen. At the beginning of
Speaker 1: the year. Uh, the average strategist had a year end
Speaker 1: objective of twenty three fifty, okay, And the year ended
Speaker 1: it like twenty six fifty. You would think somebody would
Speaker 1: turn and conservative. Now everybody marked up their expectations. Everybody
Speaker 1: was bullish, okay, and then you had the market took
Speaker 1: off in January, which further entrenched to bullishness, and then
Speaker 1: all of a sudden you had the big sell off
Speaker 1: in February. The market, I've learned, will do whatever it
Speaker 1: has to do to embarrass the largest group of investors.
Speaker 1: So just keep your wits about you. Don't be cocky,
Speaker 1: be humble, and be nice. Like I said, you know, basically,
Speaker 1: no matter how much money you have, the one luxury
Speaker 1: you cannot afford his arrogance. All that is quite fascinating.
Speaker 1: We have been speaking with Lee Cooperman of Omega Advisors
Speaker 1: and formerly of Goldman Sachs. If you enjoy this conversation.
Speaker 1: Be sure and look up an inch or down an
Speaker 1: inch on Apple, iTunes, Stitcher, overcast, Bloomberg dot com wherever
Speaker 1: finer podcasts are sold, and you could see any of
Speaker 1: the other two hundred plus conversations we've had previously. We
Speaker 1: love your comments, feedback, end suggestions right to us at
Speaker 1: m IB podcast at Bloomberg dot net. I would be
Speaker 1: remiss if I did not thank the crack staff that
Speaker 1: helps put together these conversations each week. Medina Parwana is
Speaker 1: my producer, Slash audio engineer. Taylor Riggs is our booker
Speaker 1: Slash producer. Michael Batnick is our head of research. I'm
Speaker 1: Barry Results. You're listening to Master's in Business on Bloomberg
Speaker 1: Radio