Investment guru Leon Cooperman has bought more equity in companies like United Airlines during the recent market plunge as part of a bet that the coronavirus end by June.
Cooperman told CNBC that he’s been a net buyer in the last few days and seeing “a lot of value in the market.”
“Look at United Airlines,” he said. “They took out guidance because they can’t give you guidance until they know what happens with the virus,” the chairman and CEO of Omega Family Office said.
U.S. stocks attempted a recovery on Wednesday after a rocky start to the week that shaved off more than 6% from the main indexes on growth concerns stemming from a global spread of the coronavirus, Reuters explained.
Marquee companies including Apple, Microsoft and Amazon.com were some of the biggest boosts to the S&P 500, rising between 1.6% and 3%.
Ten of the 11 major S&P sectors were in the black, with technology leading the charge with a 2.4% gain. The energy sector dipped 0.2%.
"There has been pressure on some high quality names, particularly in sectors that might be hit the hardest by the wider spread of coronoavirus," Charlie Ripley, senior investment strategist, adding that investors are looking for some bargains.
Stocks may be bouncing back from their worst sell-off since December 2018, but economist Dennis Gartman is warning that this is not a dip worth buying, Bloomberg reported.
Equities are “egregiously” over-valued relative to measures such as sales, profits and the size of the economy, according to Gartman, who last year ended his daily newsletter after three decades. The spread of the coronavirus is threatening global growth, and investors should buy safety assets such as gold and government bonds, he said.
“I’m afraid rallies are to be sold into, not weakness to be bought,” Gartman said in an interview on Bloomberg Radio with John Tucker. “I’m amused or dismayed at how many people are still willing to buy the dip, and this dip is far more serious than people want to anticipate at this point.”
Gartman’s view echoes that of Mohamed A. El-Erian, a Bloomberg Opinion columnist who wrote on Tuesday that the virus-induced sell-off “isn’t a buy-the-dip opportunity” because there’s little evidence right now supporting the notion of a V-shaped recovery.
“You want to be long the gold market, short the stock market, and long the bond market,” Gartman said. “That’s the trade to have. I have that in my own account and continue to recommend it.”
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