That was billionaire hedge-fund manager Leon Cooperman commenting on the current banking crisis that has seen the shutdown of SVB Financial Groups’s SIVB Silicon Valley Bank and crypto-friendly lenders Signature Bank and Silvergate Bank, as well as a bankruptcy filing for SVB Financial. Additionally, over the weekend, UBS UBS CH:UBSG announced a $3.25 billion buyout of struggling rival Credit Suisse CS CH:CSGN.
Cooperman, the chair of the Omega Family Office, formerly Omega Advisors, told Bloomberg Radio on Monday that he “did have a view that we were heading to a crisis of some kind, and we’ve seen it and we’re getting a predictable response by government. It’s sad what’s going on in the country, but what they’re doing is what is necessary to preserve the system.
In Cooperman’s opinion, investors are now in a “stock picker’s environment, especially if the S&P 500 turns out to be very pedestrian.” He believes that we’ve seen the “fat years” and that now “we’re headed for seven lean years,” adding that the S&P’s all-time high near 4,800 is probably going to remain the top for quite awhile.
As for where he’s putting his money now, Cooperman said he’s got some “one-off” exposures to a couple of mortgage real-estate investment trusts that are yielding 14% to 16%, alongside with some investments in energy, which he admits have cost him this year.