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Leon Cooperman's 8 tips to achieve superior investment returns – Economic Times

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Billionaire investor Leon Cooperman says that investors shouldn’t restrict themselves to a particular sector or a stock when making an investment decision, and should be willing to buy any stock or bond at the right price. Cooperman has made it known that although there is no secret sauce for investment success, it is very critical to look at free cash flow while choosing a company to invest in. “Free cash flow gives companies the luxury to do good things, whether it’s pay dividends, buy back stock, invest in new equipment, et cetera. Equally important is management and ownership and how they manage that cash flow,” he once said in an interview to a financial website.

A Wall Street legend, Cooperman built up Goldman Sachs’ asset management division during his long tenure with the investment bank. The son of a plumber in the Bronx, he went to public schools, Hunter College and then got an MBA from Columbia University. Cooperman founded Omega Advisors in 1991, a hedge fund known for its strong performance. He shut it down at the end of 2018. In 2019-2020, he began shifting more of his assets into his charitable foundation.

The finance guru stresses that family is the most important part of life, and that those who have achieved financial success have a moral obligation to help others in need. “To be successful in your chosen field of endeavor, be ready to give of your mind, of your body and of your soul to achieve that success,” he says.

Investment strategy

Cooperman always based his trading on the idea that stocks have a memory. “They know where they came from, so I tend to look at either the new low list or things in the middle of their trading range to get involved and I don’t like to buy the new high list,” he says.

In his 45 years of experience in the financial world, Cooperman says hedge fund managers must outperform others and react intelligently to the market. “You’ve always got to be on the balls of your feet — not resting on your laurels.”

His view is that it is better to invest in stocks over bonds. When vetting a potential investment, it is important to pick companies that generate cash-flow and run by honest and capable management who use incentives to make the company run well. “Find work you like to do and work with people you admire and respect,” he says.

Cooperman is of the view that investors should spend a lot of time to figure out the market. “Is the market undervalued? Overvalued? Is it going to go up? Is it going to go down? Because that determines how much risk you want to have in your portfolio.”

The hedge fund manager says investing comes with a lot of ups and downs. “In this business, if you don’t make mistakes, you’re either a liar or you don’t take many swings at the ball,” he once said.

Cooperman has always employed a classic value strategy and performed intensive research to identify undervalued stocks. He has kept an eye at micro company developments and also used macroeconomic analysis to find out how much risk to take and when to dabble in other asset classes, such as international stocks, bonds, currencies, commodities and equity indexes.

In his interviews, Cooperman has revealed some investment tips that can help many young investors achieve superior returns. Let’s look at some of these tips.

Look for mispriced assets

The Wall Street legend says the primary job of any value investor is to find assets that are sufficiently mispriced so that they can be bought at a bargain. The purchase price provides a margin of safety. “We’re looking for things that are mispriced, where opportunity for achieving excess returns exists.”

Make sure to be right while being contrarian

It is important to be right while following a contrarian strategy, the market veteran cautions investors. They can’t outperform a crowd by following a stock but at the same time, always avoiding what is popular is not the right approach. Cooperman is of the view that achieving investment success requires hard work and critical thinking. “With an average IQ, a strong work ethic and a heavy dose of good luck, you can go very far. The harder I worked, the luckier I got. If you don’t want to work and think, buy a low-cost index fund,” says the billionaire investor.

Be patient

Patience is a very important virtue and is very critical for a value investor as what price investors pay for an investment is not always what they get at the end, Cooperman says. “When you see an opportunity, you must also act quickly and aggressively. Few investors have the temperament to do this since they panic when the crowd is fearful. Inverting your emotions in an opposite direction from the crowd is not an easy thing to do. Almost everyone is better served by sticking to a low-cost diversified portfolio of index funds,” says the founder of Omega Advisors.

Have a margin of safety

Investors should always keep a margin of safety while making an investment decision. “If you buy at a substantial discount to intrinsic or private market value, you can make a mistake and still do just fine. And if things work out better than you thought, you get an additional bonus,” says the investment guru.

Understand the business you are investing in

Investors should understand all the aspects of the business they are planning to invest in. He says not knowing what investors are doing invites a lot of risk. “We have a very narrow assignment, and that’s to know the companies we know better than anyone else and own the right companies.”

Invest where competition is less

Cooperman says investing where the competition is dumb, misinformed and lazy is an excellent way to boost investment returns. Boring “get rich slow” approaches attract fewer competitors, though that is helpful in the competitive world of investing. “The good news here is that ‘get rich quick type’ people are those who you are competing against. If other investors and traders were not muppets sometimes, value investing would not work. Turning their dysfunctional behavior into profit is your opportunity,” he says.

Look for businesses with moats

The former Goldman Sachs executive says his view is that the key element in the quality of any business is a moat. “A business that has a moat around it, where it’s competitively insulated to some large degree.”

Be cautious of herd mentality

Cooperman says it is easy to get caught in the movement of a herd and it is easiest of all to follow the herd when it is close to the end of a cycle. “What the wise man does in the beginning, the fool does in the end. Even the wisest investors can fall victim to crowd folly. The basic underlying force at work is that people rarely make decisions independently. Fear of missing out (FOMO) and laziness make people follow the lead of other people and that process can snowball. Or not. And it will continue until it doesn’t,” he points out.

Investors have to respect the stock market, he adds, and if they don’t, they’re going to get wiped out.

(Disclaimer: This article is based on various interviews given by Leon Cooperman)

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Singapore REITs Double Their Overseas Investment to $12 Billion – BNN

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(Bloomberg) — Singapore’s property managers are accelerating their push abroad as a slow reopening and diminishing returns at home force them to look for growth opportunities elsewhere.

Foreign acquisitions by real estate investment trusts in the city-state jumped to an all-time high of 61 last year, data compiled by Bloomberg show. The total value of such deals also more than doubled from 2020 to $12.3 billion.

Property managers in Singapore — which boasts the most REITs in Asia outside of Japan — have long shown global ambitions, with overseas investments picking up during the pandemic. But a limited reopening coupled with the anticipated omicron surge is adding impetus to this drive, even as investor concerns over a slowing recovery grow.

“Singapore’s commercial REITs may continue to rely on overseas M&A to achieve income growth in 2022, especially if omicron brings more uncertainty on further easing of social and traveling curbs to boost retail and office leasing demand in the country,” said Bloomberg Intelligence analyst Patrick Wong.  

A $3.1 billion merger of Mapletree Commercial Trust with Mapletree North Asia Commercial Trust proposed last month is the latest in a series of moves that have seen managers long comfortable with a domestic presence favor a more global footprint. Also in December, another REIT targeting retail outlets in the city-state, CapitaLand Integrated Commercial Trust, made a foray into its second overseas market with office acquisitions in Australia.

Investors like the stability a local focus can offer, Sharon Lim, the chief executive officer of the manager of Mapletree Commercial to told reporters last month, but her trust needs to be better placed to take on new opportunities overseas and achieve “meaningful long-term expansion.” Lim’s REIT, which she described as the “last of the Mohicans” with only Singapore-centric assets will see its domestic holdings shrink to 51% within the new merged entity.

Increased Risks

Overseas diversification may alienate some investors, however, with Mapletree Commercial’s shares having declined more than 8% since the merger was announced. “Investors whose mandate demands only Singapore exposure may look at other counters,” said Krishna Guha, a senior analyst at Jefferies Financial Group Inc, adding that execution and foreign exchange risks may rise.

Still, while the CEO of Singapore’s tourism board Keith Tan has warned that a full recovery in visitor numbers is unlikely until 2025, a reopening dividend might yet emerge. Officials in the financial center have affirmed their determination to live with the virus and keep its borders open, while easing some restrictions, including allowing some workers back into offices.

Singapore’s latest property investment manager Capitaland Investment Ltd. — a spinoff of one of the country’s largest developers — said it will remain committed to local investments despite a growing foreign portfolio.

Singapore will continue to be a “core market” and is attracting strong interest from wealthy individuals, including a growing number of family offices, said CEO Lee Chee Koon in an emailed response to questions about its plans. “But given the physical growth constraints, the relative size of our Singapore business within our portfolio will become smaller over time, as we expand and deepen our interests in overseas markets.”

Investors have validated this strategy so far, with Capitaland Investment emerging as the second-best performer on the benchmark Straits Times Index since its trading debut in September last year, having advanced by over 21%.

The overseas growth fervor is unlikely to dim. A limited pool of good quality assets as well as increasing competition from global funds have also pushed yields lower, said Vijay Natarajan, a real estate analyst at RHB Research Institute. Capitaland’s Lee also expects stronger Asian-based competition to emerge over time.

Instead, deep liquidity pools in overseas markets like the U.K., U.S. and Australia, as well as more alluring freehold and longer lease terms will maintain the draw of markets abroad, said Natarajan. “We expect this trend of overseas acquisitions to continue.”

Footnotes to second chart: 

  • Chart displays % of foreign AUM of top eight REITs by market capitalization
  • Excluded names are Capitaland Integrated Commercial Trust, created through a merger in 2020, while Mapletree Commercial Trust and Frasers Logistics & Commercial Trust are pure geographical plays
  • Mapletree REITs’ financial years end in March (E.g. For FY 2020: March 2021 rather than Dec. 2020)

©2022 Bloomberg L.P.

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Ontario investment to add 300 student, 88 child care spaces in London, Ont. – Globalnews.ca

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The Ontario government says it’s investing nearly $10 million to build and improve two London, Ont., schools.

In a release issued Saturday, the provincial government said the investment will aim to support the creation of 300 student spaces and 88 licensed child care spaces.

Read more:

COVID-19: TVDSB families rallying to buy additional HEPA filters for schools

The first project involves $7.2 million in improvements to Eagle Heights Public School at 284 Oxford St. W. It will add 300 new elementary student spaces.

The other project will see the government provide $2.7 million for a new child care centre at Northeast London Elementary School at a London site to be acquired.

This project includes adding 88 child care spaces, an infant room, two toddler rooms and two preschool rooms.

Read more:

COVID-19: London rapid test site will no longer test school-aged children, TVFHT says

“The projects are part of a provincewide investment of more than $600 million to support new school and child care spaces,” the statement read. “The overall investment will support 78 school and child care related projects.”

© 2022 Global News, a division of Corus Entertainment Inc.

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Disclosures Show Dr. Fauci’s Household Made $1.7 Million In 2020, Including Income, Royalties, Travel Perks And Investment Gains – Forbes

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Last night, U.S. Senator Roger Marshall received Dr. Anthony Fauci’s unredacted FY2020 financial disclosures. The release following a heated Senate exchange between Fauci and Marshall which concluded with Fauci called the senator a “moron.”

The financial disclosures contain a wealth of previously unknown information. For example, the Fauci household’s net worth exceeds $10.4 million.

During the pandemic year of 2020, their household income, perks and benefits, and unrealized gains totaled $1,782,807 — including federal income and benefits of $868,812; outside royalties and travel perks totaling $119,626; and investment accounts increasing by $794,369.

Here are the numbers as compiled by the auditors at OpenTheBooks.com, an organization I lead. This analysis used previously known information plus the newly released disclosures.

Investment Income: $794,369

Disclosures show $794,369 in gains in the Fauci stock, bond, and money market portfolio during 2020. The total value of Dr. Fauci’s investment account was $8.4 million and his wife’s investments totaled another $2.1 million.

These funds were held in a mix of trust, retirement, and college education accounts. Fauci has an IRA worth $638,519 (up $42,291); a defined benefit brokerage account totaling $2,403,522 (up $241,418); and a revocable trust worth $5,295,898 (up $342,694). His wife’s revocable trust is worth $1,962,819 (up $156,123) and an IRA totaling $120,277 (up $11,843).

Some on the right have speculated that Fauci may have profited off the pandemic. The disclosures show that he’s invested in fairly broadly targeted mutual funds, with no reported holdings of individual stocks.

Fauci’s disclosures show that he owns a stake in a San Francisco restaurant, Jackson Fillmore, worth between $1,000 and $15,000: but received no income from the restaurant in FY2020 (or in FY2019).

Previously, NIH had released heavily redacted financial disclosures of Dr. Fauci. Redactions included the fund balances, so a net worth analysis was impossible until now.

Salaries: $668,312

Dr. Fauci is the director of the National Institutes of Allergies and Infectious Diseases and his wife Christine Grady is the chief bio-ethicist at the National Institutes of Health.  

Background: Fauci earned $434,312 in cash compensation (FY2020) outearning all 4.3 million federal employees including the president and four-star generals in the U.S. military. Between 2010 and 2020, Dr. Fauci earned cash compensation of $3.7 million from his federal employer. Review Fauci’s ten-year salary history in my previous column published at Forbes.

Fauci’s wife, Christine Grady is the chief bio-ethicist at the National Institutes of Health and made $234,284 in FY2020, as disclosed by FOIA to OpenTheBooks.com in August 2021. Grady’s FY2019 pay was also $234,284 and since 2015, Grady made $1.3 million in cash compensation.

However, Fauci’s financial disclosures only show that Grady made $176,000 for FY2020.

NIH does still not disclose Fauci’s current salary (FY2022) or last year’s salary (FY2021), despite comment requests for the information. Therefore, Fauci earned an estimated total of roughly $900,000 during the period.

Perks And Pension Benefits: Est. $200,500

Federal employees have a lucrative amount of paid time off, subsidized healthcare, pension benefits and a myriad of other perquisites. For example, after just three-years, a rank-and-file federal employee receives 44 days of paid time off. Dr. Fauci has held a federal job for 55 years.

A good faith estimate of the taxpayer cost of those benefits is 30-percent multiplied by the salary amount for Dr. Fauci and his wife.

Background: In December, published at Forbes, Fauci stands to reap a golden parachute retirement pension estimated at $350,000 per year, the highest in federal history. With cost of living increases, Fauci would receive over $1 million during his first three years of retirement.

Royalties And Professional Reimbursements: $106,328

Disclosures show that Dr. Fauci edits the medical textbook, Harrison’s Principals of Internal Medicine and serves on the board of the publisher, McGraw Hill. In 2020, Fauci received $100,000 as an editor of the publication. In July 2020, Fauci also received $6,328 for a six-day trip to La Jolla, CA to attend a board meeting of McGraw Hill, the publisher.

Background: OpenTheBooks filed a Freedom of Information Act lawsuit to get a copy of all royalties paid to current and retired NIH scientists since 2005. When NIH would not release the information, a federal lawsuit was filed in October with Judicial Watch and production is scheduled to start on February 1st.

Gifts And Travel Reimbursements: $13,298

Galas: Fauci and his wife collected $8,100 to attend three virtual galas.

Here is the breakdown: $5,000 in for the Robert F. Kennedy (RFK) “Ripple of Hope” gala in December 2020. $1,600 to attend “An Evening Of Hope” virtual event in April 2020 and $1,500 to attend a “Prepared For Life” virtual gala in October 2020.

When Fauci was named Federal Employee Of The Year at the 2020 Samuael J. Heyman Service To America Medals awards program he was paid $5,198 for the virtual star-studded event.

Background: Fauci’s FY2021 disclosure is scheduled for release in May. The disclosure should contain interesting information. For example, in January 2021, as reported by NPR, Fauci received a $1 million prize for the prestigious Dan David Prize affiliated with Tel Aviv University for “speaking truth to power.”

Most likely Fauci kept $900,000 of that prize with 10-percent awarded to Fauci-picked scholarship winners.

Comment was requested from Dr. Fauci and NIH; updates forthcoming with any response.

Further Reading:

No, Fauci’s Records Aren’t Available. Why Won’t NIH Immediately Release Them? Published January 12, 2022 | Forbes

Dr. Anthony Fauci’s Golden Parachute Will Exceed $350,000 Per Year – The Largest in U.S. Federal Government History Published December 28, 2021 | Forbes

Dr. Anthony Fauci’s Little Known Biodefense Work. It’s How He Became The Highest Paid Federal Employee. Published October 20, 2021 | Forbes

Dr. Anthony Fauci: The Highest Paid Employee In The Entire U.S. Federal Government Published January 21, 2021 | Forbes

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