Leon Cooper on Treasuries: 'Your capital is being confiscated'

Leon Cooper on Treasuries: 'Your capital is being confiscated'
Former head of GSAM says U.S. debt the worst best over the next three years
MAR 08, 2012
Leon Cooperman, founder of equity hedge fund Omega Advisors Inc., said buying U.S. Treasuries is the least attractive investment in a world of “financial repression.” Bonds will be the worst place for investors to put their money for the next three years, Cooperman, 68, said in an interview today on Bloomberg Television's “InsideTrack” with Erik Schatzker. “With a 2 percent government bond, if we're talking about marginal tax rates, you're keeping 60 percent of your 2 percent -- you're keeping 1.2 percent,” he said. “The rate of inflation is somewhere in the range of 2 to 3 percent, so your capital is being confiscated. It makes no sense.” Gold and Standard & Poor's 500 shares will be attractive investments, Cooperman said. His target at the start of the year for the equity benchmark was 1,400 to 1,450. Cooperman's New York-based fund invests in technology stocks including Apple Inc. Ticker:(AAPL) and Qualcomm Inc. Ticker:(QCOM), financial companies including JPMorgan Chase & Co. and Citigroup Inc. and health care stocks including WellPoint Inc. and Boston Scientific Corp. Ticker:(BSX) (Advisers: Which asset class do you think will produce the best returns over the next ten years? Answer here.) Omega invested in Research In Motion Ltd. Ticker:(RIMM), the Waterloo, Ontario-based manufacturer of BlackBerry smartphones, late last year and has since sold that position because it triggered stop- loss orders, Cooperman said. He has been a long-term investor in Apple and said he believes it is worth over $600 a share with “a couple more years of very good runway” growth ahead. Cupertino, California-based Apple gained 2.5 percent to close yesterday at $514.85 in New York trading. Cooperman spent 25 years at Goldman Sachs & Co., including as CEO of Goldman Sachs Asset Management, before founding Omega in 1991. --Bloomberg News--

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