Omega Advisors Leon Cooperman: Masters in Business (Audio)

actually quite fantastic. He's outperformed the S and P five hundred on an annualized basis of about four hundred and fifty basis points. His tax advantage fund has outperformed the Broad Index a thousand basis points. Uh. He is a legend on Wall Street. He began his career at Goldman Sachs, where he ran eventually ran the research department. I I

rated just number one. There are a few people who are more fascinating and more knowledgeable about what it's like to run money, to do research, to execute a portfolio then Lee Cooperman. Very accessible, very humble, a tremendous, tremendous um philanthropist, has committed to giving away a lot of his money. I can't begin to tell you enough of of how enjoyable our conversation was and what a pleasure it was to sit down with him for for nearly

two hours. He he was scheduled to leave at one thirty, and he waved me off. He just you know, kept going and understood that this was really a deep dive and didn't want to cut it short because he had to be somewhere else. So, with no further ado from me, here is my conversation with Leon Cooperman. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My very special guest today, Lee Cooperman. You may or may not have heard of him. Lee was born in the bronx

of immigrant parents. Your your whole curriculum vitae is gonna take me ten minutes to read, so I'm just gonna do the short version. Columbia Business School, nineteen sixty nine. You've got an m b A straight to Goldman Sachs, where you spent twenty two years in the Investment Research department, eventually becoming co chairman of the Investment Policy Committee and chairman of the Stock Selection Committee. You were voted onto

Institutional Investors All America Research team for Portfolio Strategy. You ranked first in portfolio strategy from nineteen seventy seven to five. You eventually set up Goldman Sachs is Asset Management division and then leave to launch Omega Advisors, where your flagship overseas fund has averaged fourteen point six percent from two to and that's about fift better than the benchmark SMP five hundred. Lee Cooperman, welcome to Bloomberg NICs to be

with you. And for those of you folks who may not be familiar with either Guldman Sachs or Omega Advisors, you're probably listening to the wrong radio station. So let's jump right into your a little bit of your background. What did you do before you found your way to Wall Street. Well, I'm kind of like in a Ratio Alger story, and I say this with great humility. I've

been very lucky in life. Basically, I was born in the South Bronx, first generation of my family to get a born in America, first generation my family get a college degree. I went to public school in the Bronx PS seventy five. I went to high school in the Bronx and Morris High School. I went to college in the Bronx Uh, West Bronx. My both of my grade school and my high school was in the East Bronx.

I went west, follow the device of horst Reeley and I went to the West young Man, go West, young Man. I went to a Hunter College, part of the City University of New York. UM, graduated in nineteen sixty four. Went to work for Xerox Corporation up in Rochester. Well, let me stop you right there. From Hunter to Xerox. What did you do on at Xerox? Well, it was very interesting. I don't know how much time we have. I tend to be I have all day. You're the

one with Well, basically, um, it's very interesting. You know. Part of my success in life I attribute to luck. Uh, certain part of education hard work. By the way, that's a theme that every person who's done an interview with me has more or less said, Well, you know, I worked hard, but I also got really lucky. Well, I would say that you're not realistic if you don't think luck plays a part in the one success. And I like to think I'm above all. I'm realistic and self

effacing and have humility. Uh. But basically it's a little bit of a story to get to answer your question back in the sixty and still maybe the case of day that if you finished your major and minor in three years, you could count in your first year of dental or medical school towards your fourth year of college you get a separate degree. I actually did something similar

with law school. I applied part of law school towards my undergraduate So you know, basically, in the summer of nineteen sixty three, I toiled very hard in the University of Pennsylvania laboratories. I took a course in physical chemistry to finish you off my major. My major was chemistry, my mind was math and physics. And I enrolled in the University of Pennsylvania Dental School. And after eight days

I wondered if I was making the right decision. And so you know, part of your life, not only his luck, is intuition and making the right decision. That that was a good instinct. I cannot picture you as all you know, instead of my hand in their mouths and I have my hand in their pockets, I guess you could say that basically I went. It was a very traumatic period

of my life. I went to the dean of the dental school and I said, I would like to return to my undergraduate school, finish you off my fourth year, unencumbered by any decision, and then in the fullness of time, making decision to either return to dental school or whatever. And he put me on a real guilt trip, uh, in the sense that he said, you deprived the hundred first applicant of a dental school education. How can you decide after eight days? And so I returned to undergraduate school.

The only person that really understood the import of my decision and difficulty was a dean of Hunter College at the time. His name was Glen T. Nigrin. I just noticed an obituary of several years ago where he passed away, and he said, boy, this must have been a tough decision. Of course, you could matriculate back into a Hunter. And I went back to Hunter, at which point I had

all elective is my major minor was completed. So I took ten courses in economics, got ten a's, and I had the unusual situation of graduating as a major in chemistry, monor math and physics, but honors in economics. And I was interviewing in the ninth seen hundred and I guess

sixty three yearly sixty four for a job. Xerox Corporation came to the campus and I was lucky enough to get an invite back to Rochester to meet with other people for a second, you know, interview, and I went up getting the best job warfer if anyone that cite the university. They offered me, I think was seventy five hundred or seven thousand dollars a year, which I accepted, and I started working there in August of nineteen four, and they really, an effect, did not make a full

disclosure to me about the job. It's what they didn't tell me when I started, when they offered me the job. Is a month later they were going to a twenty four hour work week, meaning one week I'd have to work eight in the morning to four in the afternoon, the next week four in the afternoon to midnight, three

three shifts a day um. And so I was enrolled in the University of Rochester Graduate School of Business at night, working towards an m b A. But the weeks that I was in the four in the afternoon to midnight shift, I'd have to find somebody else to shift off with work sixteen hours go to school, work sixteen hours, go to school. And I had had a lovely life a wife at that time, and he was still a lovely wife.

She's married fifty one years. And she said, look, I'm happy to work if you want to go to school full time. And I took leave of absence and I went to Columbia University Graduate School of Business in New York on a trimester basis sixty months, got my m b A interviewed, and I was lucky enough to get a job off of Goldman Sachs and who entered Wall Street. Uh via my MBA from Columbia to Goldman Sax. I'm Barry Ritults. You're listening to Masters in Business on Bloomberg

Radio and my very special guest today, Lee Cooperman. He is the founder of Omega Advisors. Prior to that, he spent twenty three years in in the investment research department at Goldman Sacks. Let's let's talk a little bit about um Goldman Sacks. You went right out of Columbia where you got your m b A into not the sexier investment banking half that I think Goldman at the time was better owned for, but into research. What was your

thought process. What attracted you to that? I basically had a strong interest in investing through investment research would be a good foundation for pursuing career in investing, and Columbia was known as a deep value school. That was the training you had. The professor had the greatest influence to me was Professor Roger Murray, who was an adjunct professor of business at Columbia. His day job was being the chief investment officer of College Retirement Equities Fund, and he

taught at Columbia. He also was an author of one of the follow up editions of security analysis, the original publication four by Graham and Dodd, and he honed my interest. He was a fabulous professor, a real practitioner of his profession, and one that was a great inspiration. But you know, um, it was a great experience. I never I like. I like to say I like the higher PhDs in my business. Uh, but my PhDs are poor, hungry and driven. Uh. Isn't that?

Isn't that something that Mario Gabelli used to say all the time. He says it all the time. We're great friends. You know. One of the great things that came out of Columbia Business school, was married when I met, and we remained close friends for fifty years. You know, it was the Columbia experience that got me the entry card

into Wall Street. I wouldn't say it's right, but the odds or I could not have gotten into Wall Street directly from Hunter College into an investment position at Goldman, But part of this, like I said earlier, horatial outer story. You know, I um, when I went to Columbia Business School, I had a six month old child, I had National Defense Education Act student loan to repay, had no money in the bank, and had to get onto making a living.

So I got my degree on January thirty one of nineteen sixty seven, and the very next day, February one to sixty seven, I started my close to year career at Goldman Sex. So you were in the research department. Let me let me go over some of the stats from that, because they're really so impressive. You voted on to the All American Research team. You were the number one portfolio strategist according to Investor Institutional Investor from nineteen seventy seven to ninety five. That that's a heck of

a good run. And then after all those years in the research department you helped build Goman Sacks Asset Manager. I actually started it, but i'd say first in the research department. Uh, not not being self serving. I had two roles, and I started at as an analyst in the retail business, and then the mid seventies I became co directive Research. In nineteen seventies six, I was named partner in charge of Research. I essentially had two roles

in Goldman Research. One I would call an orchestra leader, I ran the research department, and the other, call a solo, was to my role as chairman of the Investment Policy Committee, helping set investment policy and marketing that investment policy at investing clients. And uh, please used to say again, not big self serving, because it was a real team effort. But when I took over the research department at Goldman,

we were basically unranked. And when I left, it's a polite way to say dead last, No, not that last, but we were We were not ranked in the top we were not reviewed as a research firm. And when I left the research department in nine to start Goldman Sacks Asset Management, Goldman Sacks Research was number one institutional investor America team number one in Charlie Yellis's Greenwich Research survey and number one in financial world, which doesn't exist anymore.

The first to still exists in terms of measuring people's effecting. This now to show you how a little influence I say, this is not this is that video They had a little influence I had at Goldman and I said this had a big smile. I was well regarded. Uh. For a decade, I was telling Goldman Sacks, you're making a mistake by not being in the asset managing business. I was. I was shocked when I was reading your background and I'm like, wait, Goldman Sacks didn't have an asset management

division before. Something it made it's hard to imagine teen ninety one. Actually, and for deckcarese telling the firm you're making a mistake by not being an asset management and for decade they said, Lee, you don't get it that we are of the belief that brokers should do brokerage, money manage and do money management. Don't compete with your customer, Goldman Sachs typical customer at that time was an institutional investor.

And so I said, well, look look around your Mary Lynchest Management, uh CSFPST Management, the Kid I Be Buddies division is called Webster att Management. Everybody was getting into the business set. One firm who was Goldman's art trading rival, that was Solomon Brothers. And then one morning Solomon comes out and says, we're pleased to announce that Bob Solomon Jr. Will be leaving the research department to start Salmon Brothers

asset Management. And Bob Rubin and Steve Friedman, who were then co heads of the firm, came to me and said, you know, we made a mistake. You were right. You were right when you leave research and do for us to invest in management what you did for us in research. And so after about a year or so doing this, because aim very clear that you know, I had to be on the road constantly to innovate new products to generally,

you know, capture new assets. And I really wanted to visit companies and find outstanding managements make out standing investments. And I have great respect for Goldman. I owe a lot to my success at Goldmen. I started with nothing. I left Goldman very wealthy. Man. I told him I really wanted to retire ephemistically, I worked hard and now that I worked at Goldman, I worked very hard at Goldman,

and I wanted to basically start a hedge fund. And I believe in no blessed Oblieg and I told him, you know, we were still a private partnership UM at the time. And uh, I said, you know, if you think my having a hedge funds of violation might noncompete, you know, I wouldn't do it. And they said, no, we we can't possibly say that because you know, we don't want to have a hedge fund. And so I started Omega, and uh it became something I didn't plan.

To be honest with you, Uh, this is not a TV but I'm I'm you have a big smile on your face. But I basically also a larger than average guy. And I said, you know, I'm gonna have a small business. Uh, and succeed at the only thing that's alluded me all my life. Let's get to a normal size is and lose some weight. And I have a gym in the office and work out and you know, manage a few hundred million dollars and down to a normal size. Take it easy a way, well, no work, but basically get

to a normal size, have a more balanced life. And uh, what happened is you to my first year, we're up about twenty three or twice with the market, and in ninety three had about a year I was up like sevent because we correctly called a big decline interest rates globally, and the firm really starts to grow quite dramatically in size. Uh so, Um, we've gone from the start up with a few hundred million to nine and a half billion.

But it's been a great run. And uh, I love what I do, and I do a lot of talks to meetings with youngsters. They try to give them career guidance. I tell him, you know, follow the advice of Henry Ford. The best way to make money is not to think about making money. Another theme is Warren Buffers is going to work with somebody you respected admire, tap dance to work and everything will take care of itself. And what I say basically is do what you love, love what

you do. If you do what you love me you love what you do. With a little bit of luck, you're a bound to be successful. And that's kind of where I'm at. I mean, I love what I do. I'm Barry rid Hults. You're listening to Masters in Business on Bloomberg Radio. My special guest today is Lee Cooperman.

He is the founder of Omega Advisors and basically spent the first twenty five or so years of his career at Goldman Sachs as the UH director of the Investment Department, and he created and helped build the asset Management Department. Let's talk a little bit about philanthropy. League you Um, you said earlier, you're the son of immigrants from the South Bronx. Um, did you ever imagine when you were going to school and in the Bronx you would grow

up to become a philanthropist? Never? Never, never, never? What what is that like? Coming and from from self described very humble roots. There's there's a question. We have a mutual friend, Doug Cass and Doug said to ask you about the plumbers wrench that you sometimes carry around. Uh. Doug's very kind towards me, very complimentary, and I appreciate Doug, and Doug's a bright fellow. Look, if you step back and think about it, there's only four things you could

do with money. You could consume it on personal expenditures and thankf I've been in a business that generates a lot of income, and if you if I don't collect art, I can't consume my wealth. And I've never seen the value proposition art and I really obviously missed a huge opportunity well the past a couple of decades. Yeah, okay, but so you could consume your well the second as you can give it to your children. Okay, And I'll take these one of the time after I mentioned all four.

The third is you can give it to the government the form of taxation, or the fourth as you can recycle it back into society. Okay. So on the first one, I'm not a consumer. I tend to basically work very hard, work very long hours. I have a very purposeful wife, married fifty one year. She has been an educator for thirty five years, working with learning to say ablell neurologically impaired children. And so she's not a consumer because she's was working most of her adult life. Um, so I

can't consume it. You know, you could go out and if you if you if you're not collector you don't have enough money no matter you know what you make, because you could buy a Picasso with the other day for a hundred nine million or whatever. So I'm not a consumer. Second, I believe in leaving my kids a rational or sum of money. Do not want to take away from them the incentive to self achieve. Okay. The third is who wants to give it the government? If

you don't have to give it the government. Fourth, I've made the determination. My family is going along with the determination to take the vest bulk of my money and return into society to try and create equal opportunity for these splendid youngsters that don't have the opportunities today that I enjoyed. You know. So let's let's start with the pledge. You had a dinner with um a number of people, and you saw in the pledge where you essentially committed

to giving away the majority. I think that the pledge says you're a get away at least half, and I intend to give away all my money. Was I given my children their inheritance about three or four years ago in advance in events. Here's the money. Trying not to do it well. I have two kids. One's a fabulous money manager. I'm very proud of his accomplishments. Also runs run a hedge fund, and he's very very smart. And then I have another son who was equally smart up

in a different field. He has a PhD degree and environmental scientist work for conservation to national on environmental issues. Uh. And so I gave them their inheritance and what's left over. Basically, my game plan is to give away half during my lifetime to organizations that have made a difference to my family in our lifetime, and the other half on to give to a foundation where my children, grandchildren, daughter in laws could periodically get together and give away the money

to worthy organization. So let's talk about some of the organizations. Well, let me first, you know say this that you know the I said this to warm buffet. If you're speaking to people of great wealth, asking for half is not asking for enough. But nor is that request original hundred Andrew Carnegie said, he who dies rich dies disgraced. In ninety Winston Churchill said you make a living by what you get, you make a life by what you give.

In sixty one, when President Kennedy was inaugurated, he said, if I we call it, Craig, that's not what your country can do for you. Ask what you can do for your country or something alone and then I told Warren, I said, I'm Jewish, and he said that Thomas your measurement not by what he has, but what he gives. So, um, you know, I buy into the idea of philanthropic activity. And you know, the large bulk of my giving thus far has been to organizations that have made a difference

to me in my lifetime. So you know, a Hunter College. I got a first class education from the University of New York for twenty four dollars a semester. I know, did I get a first class education? But I got a terrific wife. So we've given them a very large amount of money, both for a scholarship and uh and financial aid for when I went to school. I mentioned twenty four hour semester. I think the kids today like six thousand dollars semester. That's cheap compared to the private school.

It is, but these kids have trouble coming up with that kind of money. So providing financial aid to help giving them equal opportunity. Then, um, I have a deader gratitude to Columbia of opening the door to my career in Wall Street. And I've given them a doubt a chair. You've set up some scholarships and you've given some unconstricted funds to them as well. Yeah, yeah, well there's a large number. I'm embarrassed to mention in numbers. And I'm

not the most generous guy you're gonna meet. I've done what I felt I want to do, so I think our industry is popularly with a lot of very generous people that have have a good soul and want to give back to society. Then third, I was a trustee for many years of St. Bonabus Medical Center, where the largest hospitals and stay in New Jersey, and they were endowed a new wing that's on the construction right as we speak. I'm Barry ri Heults. You're listening to Masters

in Business on Bloomberg Radio. My special guest to day is Lee Cooperman of Goldman Sachs and now he runs the hedge fund Omega Advisors, and I want to talk a little bit Lee about value investing, because really you're one of the great value investors. Your your track record has been outstanding. You've outperformed the market by almost fifty percent. Your your long term track record is fourteen percent and change per annum, significantly better than than the benchmark at

least that's the most recent data. I saw about four and fifty basis points neative wolf fees and nexus to the SMP, which is fine. We don't want a leverage portfolio, so for non leverage, non leverage, that's fantastic. Your percent always room for improvement. But we're OK. So so let me throw one of my favorite quotes of yours at you and get some comments you. You have been known to say your favorite question is what is ridiculously priced? Now? So is it fair to say that you're not a

believer that markets are perfectly efficient? H? Yeah, I would say that. I don't think Warren Buffett got going from flipping newspapers to orre seventy five billion dollars if the market was totally efficient. Whether it's Mary Gabilly, whether it stand Drucomo, or there's Lee Cooperman. I think that everyone

seems to think that it's hard to beat the SMP. Well, if it's so easy to underperform, the ability must exist to outperform, And I think there's enough people that have outperformed over number years to suggest that with patients and some brains and a little bit of luck, that you can outperform. So I'm committed to that proposition. I try to make money for my investors a number of ways, but number one, I do spend a lot of time on the macro picture, you know, as the stock market overvalued,

is it under valued? Is it going up? Is it going down? Because at the end of the day, stocks are high risk financial assets to turn bonds and casual low rist financial assets. And if it's an environment that's negative for stocks, I want to be exposed. On the other hand, of his environment part of the stocks positive the stocks, I want to be heavily exposed. So let me ask you right now, what is ridiculously priced today. I think the only place that there's a bubble, in

my opinion is fixed income. I think in any kind of longer term context, the Fed funds rate doesn't belong

at zero and higher. Yeah, I would say so. I mean I think that uh, if interest rates deserve to belong where they are, the stock market is not going to go up because over time, whatever the market is, whether the United States, whether it's Europe, whether it's Japan, whether it's uh China, that you would think that the long term return in the stock market would be a function of the growth of the economy, the rate of change in corporate profits, the consumer price index, and what

you can earn in alternative instruments, whether it be bonds or cash. So if you take a look at the United States and take thirteen and fourteen, take those three years and average them, the ray of growth and ECONI has been about two point three percent per annum, so we're way lower on rates. Well, well, let me go through. So two point three was the real GDP growth. Profits rose a little over six percent, the freight of inflation

was about one eight percent. If you were conservative and sat on cash, earned zero for the three years, and the tenure government to current coupon was about two point to two point three. Notwithstanding those very modest numbers, the stock market returned over per annum for each of the three years thirteen and fourteen. I think that game is over. I think that the markets caught up. The markets about sixty and a half seventeen times earnings. I think very

fully valued any kind of historical context. Uh, some would argue is maybe modestly overvalued rowth of the history, but if you look at fixed income, it's very overvalued. Roads

the history. I always tell people. I don't want to sound like a statistician, but from nineteen hundred and sixty to the present, the multiple in the SMP five average to touch under fifteen when the rate of inflation range between one and three percent where it is now, the multiple was about sixteen point seven sixteen point eight where

we are right now. We are now. However, that same fifty idea period when the multiple the market was fifteen, the tenure US government average six point six seven currently two point three, so you're a better third of the long term average, and T bills average a touch under five currently zero. Okay, so relative to fixed income, the

market is very attractively priced. I think the only place I see a bubble is because of the extraordinarily accommodative monetary policies globally that interest rates are well below where you ought to be. And if interest rates belong where they are, that means growth in the economy, growth and profits are not what people expecting. So it's one of the other. Either we're in a very overextended bond market rally and and rates have to go higher, or stocks

are very pricy. It's one or the other, and it sounds like you're betting that stocks are reasonably priced relative to all these other metrics versus bonds. I think the stock market already allows for some rise in rates, and I think the issue for the stock market deal with is a slope of the rise. I mean, I'm somewhat quizzical. A matter of fact, I just saw Gary Cohen as a very bright man in a comment that the market is not prepared for a FED rate rise, and I

don't get it. I honestly don't get it. Everybody's talking about it almost every day, okay, And I'll give you the statistics. There's been eight rate cycles since the mid fifties, and on average from the first FED rate hike to the market peak was thirty months. It took thirty months on average the market the peak after the first FED rate hike, and the hour of the shortest period of time was ten months. And those rate rises, those eight periods in the mid fifties did not start from zero, okay.

And on average, from the first FED rate hike to a year after the first FED rate hike, the market was hired by almost ten percent. And so you know, rising interest rates are indicative of improving economy, and so I think it's only when the rates get to a level that's competitive with returns and docks and the stock

market start to decline. But you know, we have a central bank that's cheering on for more growth, more inflation, and they're gonna be as a comminative as they can be, and I think it's gonna be it's gonna require inflation over two percent for the FED to become more restrictive, and that would probably require wage growth of about three and a a half percent, which probably won't happen until probably

late maybe. You know, we ran similar numbers that you just described in terms of how the market performs in a rising rate environment, and the one thing that was really clear was when you start from relatively high interest rates in a period of high inflation, that's the sort of rate rise that's not great for equities. But when you're starting from a very low level and what's lower than zero and inflation is modest, you tend to see smart stocks rise even as rates go higher. That would

be my view. It's only you know, it's it's it's not a complex concept, but it's very very important point gonna make, and that is, over time, the only way bonds are just to higher interest rates and the decline in price to keep the coupon current. The way stocks and company to adjust to higher inflation is they take the inflation in their costs, incorporating their selling prices, so higher inflation lifts the nominal level of revenues and earnings.

Is only when the FED or central bank is fighting to curb inflation that the market starts to decline because curbing inflation is tanamount to curbing growth, and investors pay a low multiple anticipation slow in growth. But we have a FED that's very concerned about you know, income disparity, social inequality, and wants to get more economic growth. And so I think it's would be quite some time before the FED takes the punch away from the punch bowl.

Uh you know, I mean it wasn't original. I think it was George Schaeffer, some technician, uh fifty years ago coined the phrase three steps and stumble. It took three tightens by the FED for the market that to have a stumble, and we haven't had the first tightening yet. And it's fairly safe to say that we're not looking at any sort of real inflation and wage growth, even the most recent data, which has been improving, still fairly

tapped in terms of wage improvement. I would say that the rate of inflation is stath of two percent, and uh, it will be a while before we get above that. So so let's talk about some of your favorite metrics. You mentioned where the pe ratio is. Tell us about other ways that you look to measure equities, whether it's dividend yield or I'm very eclectic, you know. As I said before, we've start out first trying to develop a

view of the market. Once we done macro view, and then on the bottom up we try we understand the value proposition at the SMP five hundred, which is the broadest based, the most accepted index offers. So if you look at the SMP five hundreds and index of five companies growing on average five maybe six percent per adam that basically has a dividend yield of about two percent, that has a debt to capital ratio for around thirty five or thirty six percent, sells a little under three

times this nominal book value. And four that statistics, you're paying about sixteen a half seventeen times earnings. So our game is very simple. We try to find more growth at a lower multiple, more underlying asset value than the market has at a lower evaluation, more income than the market offers that a more attractive valuation. And you know,

the bond market is very homogeneous. You know, if you're talking looking at triple A bonds, double A bond, single A bonds, bonds of a similar quality moved with an eighth of a point of each other, it's very homogeneous. The stock market is heterogeneous. The SMP might be twenty one as we speak, but there are some stocks that might be already and some stocks that are seventeen hundred on the index, and we're trying to be long the seventeen hundred index type equivalence and be short of out.

So when you say some stocks are two hundred, you mean they're very pricey, and the stocks are sere are trading at a discount relative to what we perceived to be the underlying asset value of the business. We've been speaking with Leon Cooperman, founder of Omega Advisers. If you enjoy this conversation, be sure and check out the rest of our discussion. You could see that on Apple, iTunes, Bloomberg dot com, and SoundCloud. Be sure and check out my daily column on Bloomberg View dot com or uh

follow me on Twitter at Rid Halts. I'm Barry Ridhults. You've been listening to Masters in Business. I'm Bloomberg Radio. Welcome to the podcast portion of our show. I know I say this every week and you guys will make fun of me, but really I have a very special guest this week, someone who I've been actually chasing for

quite a while. Lee Cooperman, a legend on Wall Street, ran Goldman Sachs Research department for twenty plus years practically, and then set up Goman Sacks Asset Management Division UM his hedge funds Omega Partner now manages about ten billion dollars just under Is that about right? Nine three nine point three long term returns in excess of about four fifty basis points over the SMP five over a long period of time. I really have so many questions for you.

Let me start with some stuff that I we skipped through on the radio portion. So I get the sense from you that Colombia extremely formative to you as an investor. Columbia Business School, Yeah, Well, as I mentioned, I studied under Dr Roger Murray, who was a real practitioner of Mega.

If you're familiar with the Tech Security Analysis by Graham and Dodd, which is the kind of bible in the classic, and there is a section there where there's like a ratio and now analysis where they had about the twenty different ratios over ten years to study a company's financial progress.

I remember from my paper for Security Analysis as I did a study contrasting JP Stevens with Burlington Industries, and I had this ten year ratio history, twenty different ratios, and I had a transposition and one of maybe two statistics in the exhibit, and Dr Murray caught it and circled it and read, this is the kind of guy who was sharp understood the business. And you know his his love of his of his uh vocation rubbed off on me and you know it was a great business.

You know where else I'm getting paid for enjoying what I do. I mean, it's my vocation, is my advocation, and historically it's been a means of supplementing my income because if you invest intelligently you could do very well. So I kind of I love the game. Um, I get an earlier, stay late, uh your your work ethic. Doug Casts we just got stuck. Earlier, Doug called you the James Brown of the investing business, the hardest working

man in the industry. Maybe it's because I have an average right que, so I got to work card that somebody else is smart. That's nothing, you know. I get in around six thirty sixty five in the morning, and I tend to be an information hog. So I go out pretty much every night of the week with other money managers or companies to try and basically develop insights into my investments. Uh. And I always trying to learn from people that are probably smarter than me or equally

adept at what they do, and we exchange ideas. But I'm totally committed. I believe in the concept of total commitment. I believe my investors are owed my total commitment and fidelity. And uh, I'm never striving to be number one, but I want to deliver a competitive return to my investors.

I do not want to get rich under performing. So when I started my business, UH twenty four years ago, I had an exhibit which is still my exhibit today in my pitch book, and it says I tell people when when I meet in a perspective investor, they say, well, if I invest with you, what am I gonna earn? I would always say the same thing. I don't know what you're gonna earn, but let me tell you what will make me happy. Because what makes me happy doesn't

make you happy. I'd rather not invest with me because that's the basis of a flawed relationship. So my objectives are Number one, no down years, and I've had four down years in twenty four. Always came roaring back. But I've had down years. Uh, that doesn't mean you change your objectives. That's still my objective, not to have a down year. Number two, I want to beat the SMP five net of my fees. I don't want to make a lot of money under performing some mindless ben benchmark.

Number Three, I don't run a leverage portfolio, so I'd say, you know, ten to twelve percent net returned to the investor would make me happy. We've done fourteen percent net, so I'm fine there. And fourth, I like to have less volatility than the market. So I like to app perform the market while being less voltile of the market. And if you buy into that value proposition, come invest with me, and I can assure you that we have

a total alignment of interest. So you know, we met nine point three billion of that is general partner capital, So you know we So you're a big investor in your own my firm. You you you eat your own cooking, eat my own cooking, and the team meets their own cooking. We have a forty nine of us in the firm, twenty five general partners. They all have money in the farm UH as investors. And what I'd like to say is we prosper the most when we get it right, and we get hurt the most when we get it wrong.

And we're not in an asset capturing mission. We're in a mission of trying to generate capital games and have a total alignment of interest. You mentioned your down years, and you mentioned something and when I was so, we do a lot of research before I sit down with a Lee Cooperman and and one of the things I read was really quite astonishing. So one of your down years was oh eight, you were still less volatile than the market the SMP. The SMP was down thirty eight percent.

You have down thirty But what I wanted to ask you about in oh eight and o nine, every hedge fund I read about was gating their funds meeting. They have an an option to not let their investors withdraw money, and you refuse to do that. You said, we're on gated. If you're not happy and you want to take your money, it's your money. Take it. Yeah, I have Uh. I think it was in New York Times and a little

story about that time. That's where I found that that they had a picture of me and under the pictures said they'd have to load me into my grave before I get a capital who did not honor a high water market. There were two aspects of oh eight, I'm sure your your listeners understand. But one of the negatives of the hedge fund, and it's fair by the way, uh, compensation schemes is a so called high water mark, you know,

where you get paid for appreciation and lose money. You've got to make back the lossit before you get paid again. Another word, just started a hundred bucks and you're getting two and twenty, it drops down to eighty. The performance feed doesn't show up again until you're over that hundred again exactly, and a lot of money. Match is elected to close up and oh wait, because they got way below their high water and they could not make an incentive fee, and I kind of feel that's morally wrong

because it's one thing if it investors. Look, I'm scared about the environment, and I want my where where I I'm scared about you the money matag, I want my money back there. To stay of money, they should get it back, okay, But to voluntarily give somebody back the money. And so I'm closing up and retiring because i can't make money is wrong because the high watermark is an asset of the investor, and you should not deprive that investor of the asset as long as he or she

is willing to continue to take the risk. And so, uh, closing up and giving back money I think was wrong. And the other thing that and then, by the way, relaunching under a different name, there's some huge some of that happened. When you started. There were you know, I'm gonna quote Jim Channos back when you know, we look at how many hedge funds are not generating alpha, and Jim Chanos said said, well, when he launched, there were a hundred or so hedge funds and they were all

really profitable. Now there's ten thousand hedge funds and it's the same hundred that are generating most of the YA. I can't generalize, UH, but you know, I've used this as a hand out. I think a very very distinct

whish the person for for good reason. Carol Loomis, who has been advising Warren Buffett on the writing of his annuary portfet know fifty years I think nineteen seventy one, wrote a very negative article about hedge funds UH, focusing on the performance from nineteen sixty eight to nineteen seventy where all the hedge funds got murdered, with the exception of Stein, Hunt, find and Burke, which which was up five percent in that period. And she kind of rang

the death knell for hedge funds. UH. And if you go back and look as as distinguished and smart as she is, and she is distinguished, you're smart. Couldn't been more wrong. The largest hedge funds in nineteen sixty eight was a W. Jones at two hundred million, okay, And the whole industry might have been a billion dollars if you're lucky. And today I don't know, the hedges over three trillions, three trillion dollars. And you said ten thou

hedge funds. Bridgewater has a hundred almost a hundred fifty billion a q u R as a hundred plus. It's all about performance. If you could deliver the performance, you'll

have a business. And so what happened in two thousand and eight is uh, the stabilitating year of the five years before two thousand eight, Let's say two thousand and two to two thousand and seven, hedge funds were out performing conventional money managers, and they attracted a lot of money, okay, And what happened two thousand eight is people got scared. I didn't realize you could lose money by being in

a hedge fund. The fact that the average hedge fund was only down six less than half d SMP didn't impress People say, I didn't realize you could lose money, so they asked for their money back, and the hedge fund industry shot themselves in the foot by gating capital. There's nothing no better way to get money from an individual by telling me you closed, you know, like made

off with time. People we want that which we can't have, Okay, exactly that well phrased, and uh, there's no better way of scaring people than telling you can't have your money back. So even though the hedgefund industry performed their role by being down less than half of the industry by gating capital. They're scared everybody, But we didn't get We had about

six seven million dollars of redemptions. Every dollar was met for cash, no gating, no in kind, and life went on and we worked very hard to recover our high water mark, which we did. You know, two thousand nine, you were up about doubled the market performance. So well, that's been a tendency where we underperformed. The history has been that we generally significantly outperform coming out uh we uh, you know, we were up a week before Lehman Brothers

hit in two thousand and eight. We were up on the ear We totally really because the market was down about I want to say about twenty something. I think was less than that before Lehman hit before made less than that. But but I recall that point in two thousand and eight was a negative year off to look

up to very I think much more modestly. I'd helped take it up modestly, and we totally misgauged the effect of Lehman's and ovously in the market, and the fact that there were a lot of people along with us, including the government, is irrelevant. My investors looked to me to protect their capital and with my responsibility is my era. Okay, The only good thing I can say is we stuck with the guns. We came back fifty and oh nine flat and eleven thirty four in twelve and thirty eight

and thirteen and this year. Uh. Last year we had a bad year, my worst year relative to the market. We were flatish and the Y S and P was up. But this year we're about two and a half times. Yes, and people have about seven eight percent. But it's tough. Game has gotten tougher and a lot of competition, a lot of competition. But you're you even still with this competition, you've managed to put up some those are all star numbers. Even with a flat year or or an underperforming year.

That that's a heck of a run. That's seven year. Well said enough. You know, we've been blessed by a trended bull market. Now of course the UH and on the right side of it, yeah, we we've had a positive view. We try to add value to portfolios in five ways, and the first as I mentioned before is stocks are high risk financial assets. Short term bonds and cash lowrist financial assets. And we spent a great deal of time trying to study the market. I have a

terrific partner, vice chairman, Steve en Horne. He worked I actually one of my better heart my best hire in my career. I hired him at a podential insurance. He worked directly under me for twelve years a goldman. I retired from Goldley. He retired from Goldley in ninety eight, not with the intent of joining me. He wasn't sure what he was gonna do. And I read about his retirement. I called him up and we had dinner, and I

got him to rejoin me as vice chairman. And he spends the bulk of his time on the macro big picture. Does a wonderful job for the firm. And we have a whole policy group that meets every Monday to discuss the global economy and FED and so let's talk about that, because I'm fascinated by your process. What are those Monday morning meetings like, well, you know, we get we get together at eight fifteen the morning. Our head of macro

trading is on the many. Actually we have two people in macro trading on the committee and they're studying China, Japan, currency fixed income. We have a consulting economists that participates in the meeting, Steve and I and our two co directors of research and we we we it's like kind of putting together a heuristic model about the world. You know what looks miss priced, you know what looks overvalued? When is the FED gonna move? What is the FED move gonna be? Uh? What is it gonna what's the

impact on the market. You would you rather be in, uh, Japan or Europe or United States? What's the return profile on each of these markets? Where do you see FED funds at the end of t s And we're trying to find, you know, where the intelligent bed is. So we're doing well this year in part because we have money in Japan, we have money in Europe. Were short to short endo the yell curve UH, and we've been short UH the yen and been short the euro. Was about to ask you are you long Japan shortly end

and and how do you affect that trade? Well? In the in the cash market, we don't need to borrow money. We have plenty of UH. You know capital and we basically are we don't do a lot of individual stocks in Japan, so they're not to my liking in all honesty with long the topics and Nikki as opposed individual stocks because we don't have a lot of stock expertise,

but we've had a strong macro view Japan. Don't have a lot of Japanese stock expertise, no, but we have a view of the Japanese market, so we've may expressed that bet through the indices um and we kind of you know, you have qui infinity. There many globally competitive companies sellaying a very reasonable valuations with the multiples in Japan are quite low relative to their intrat strate structure. And we believe Europe is several years behind the United

States in terms of the economic recovery right now. Has been buffeted by what's going on in Greece, but general belief is there will be an agreement with Grease and not gonna exit, and if they did exit, other than a short term adjustment. The reality is Greece is two tents of one percent of global gdp UM and it would not be as significant as the market seems to make it make it out, and I think that they'll stay in the because Germany will basically compromise. You mentioned

Steinhardt earlier, Um, I believe his farm. He's an adviser to wisdom Tree. Is that right? Yeah, that's a personal investment he made. I don't know that much about it, but they're big product over the past few years has been there hedged Yen Long Japan product which has just blown up. It's become a huge made a great investment Wisdom Tree. Jonathan Steinberg has done a great job. I didn't have the pleasure of knowing him. I knew his dad, but basically Michael had the opportunity to back him, and

Michael made a great investment decision. I think Michael has done extremely well in that investment. I don't know, I don't know the details, but I think he's made a lot of money. So let's keep working our way through some of the questions. Uh I missed you mentioned Mario Gibelli was with you at Columbia. Who else was in your class of Columbia? Two guys that made remain clost most closely in touch with were classmates. Is Art Sandberg and what's he doing? That is he's doing a venture

capital in a major way. And he's pleased to report he's extremely happy, doing very well, very successful financially, very scable, just a very high quality human being. UH. And then Mario and I have made remained closely in touch for fifty years. UH. I have great admiration for Mario. I like people that deal well with this success, that remember where they came from, UH, and are prepared to give back the society and the nice thing I like to say,

and I've said this so often about Mario. The only thing that's changed with Mario, other than a lot of digits after his net worth, is the color of his hair. When I knew Marrio, he was a redhead. Now he's got a full head of gray hair. He weighs less, I think today than he weighed when he went to Columbia business schools, which I would say I'd love to be able to say. I can't say. I'm a bit heavier.

But he's a He's a great person, great human being, and a terrific investor and has built a fabulous business. I think they manage it with fifty billion dollars, a very successful public company and very generous and UH. He and I get together. I say at least a half a dozen times a year. In fact, I invited him. He's not Jewish, as you can hell from the name I took. I took him on a u j A mission to Cuba at eighteen months ago with his lovely wife, Regina uh And then he and I and wives went

on about ten day around the world trip. On one of these was sponsored by Columbia where they tartted a plane for seven year eighty people and they have a few lecturers and a doctor that goes along with you and plane lands. The next thing you see, your luggage is in your hotel room, and you put your luggage at your your hotel room door and it's gone and

so very nice too. We went to Turkey, Egypt, uh Ti, porn Agria, India, the Los city of Petro, and Jordan's and uh Monica, Morocco, and it was very interesting and we spent that time together. Now he's a global investor. He's all over the world on a fairly regular basis. Big transformation for him because he used to say it was strictly United States only, but now he's a big emerging market. Guys, but you were are famous for not

really liking to take a vacation. Well, uh, let me say this that you said, or let me we phrase that the best part about going on vacation is coming home. That I would absolutely acknowledge. And the vacation I just referenced with Mario. The best part of vacation was as follows. I'm standing in the value of the kings and lux for Egypt looking at that many many, many, many thousand year olds fink statue. My cell phone goes off at one o'clock in the afternoon and it's seven am New

York time. It's my trained desk calling to tell me that largest position Atlas Energy just agreed to be taken over above the last sales by a chevron. And I would say that was the highlight of the trip, not take anything along. So it wasn't the sphinx. It was a takeover, and the takeover happened to be a largest position. Um so uh yeah, I'm I kind of in touch with the office all the time. And uh but you know, let me say this, and I give my wife a

great credit. I have two wonderful kids, have three great grandchildren, I have a terrific marriage, and I don't think I would be successful if I didn't have a successful marriage, if I didn't have terrific kids. And I've had a very balanced life, and I've always had that wisdom to know when they go home and cut short that business trip or not go away to balance. And yes, there

was a perfect example. I was supposed to go to a business dinner and I sent, you know, for the last two weeks, I've been that every night other week at the time to co up to missus and say, I'll meet you at Touro's for a pizza for dinner if you're free. And that was the right thing to do down near Canal Street. You know. That was Toros in the Maplewood, New Jersey. Okay, so you're just a regular pizza I am. I am. I'm a regular guy. I have not learned how to live rich. So let's

let's go back to that the plumbers wrenches. That is that a myth? Or is that true? No? Well, I guess an analogy. I would say that when I started Omega, I hung personally every picture in our office. And I don't ask anybody do anything that I'm not pre paid to do myself. I take great pride of ownership. I like to make sure the office looks proper. And you know, I just ask people to basically be committed to the client's interests uh and basically know what you're doing and

work hard and be knowledgeable. And I tried to set an example, like I said a moment ago, I don't ask people to do what I'm not pre paid to do myself. So so, and this goes back to Doug said, so he shared some insights with me about you, because so for those people don't know, Doug cast runs Sea Breeze Partners and and his very articulate and writes a lot and and Doug said, Lee never wanted to forget his roots that he comes from. Um a dad who's a plumber. And he used to walking around in his

briefcase with this heavy giant plumbers wrench. And I didn't know if he was pulling my leg. I think he was. I mean, I don't recall mean I car enough waight around as it is principally saying he's right, But I never carried around the plumbers ranch. And I've used the plumbers wrench. I've cleaned that, I've cleaned out stoppages and used a wire. Wait, so you're cleaning toilets and omega, is that what you're telling me? No? But now what I do is I put a sign on the wall,

please shut the light off when you finished. You know, you would rather give them money away than just waste it frivolously. Yeah, that's the motivation behind this. I think there was something I made note of. Um and uh, go ahead, correctly. And I really don't associate this with the person who said it, Okay, but it is the meaning of life is to find your gift. The purpose of life is to give it away. That's that's an interesting I'm saying that. Pablo Picasso. Actually it was a

bit of a womanizer. But basically, uh, you know, I having taken the giving pledge and having taken care of my kids and all. And I'm not complaining, not bragging, because the people I know have a similar oriolation. But you know, I'm working for charity. Okay, so you look at all the money you raise at this point is going to go to a higher purpose. That's the fact that like, and I would just like to make sure it's properly utilized. You know, I've worked too hard for

this money. I want to make sure that it accomplishes some end to it. So so let's talk about that a little bit, because that's a question that I see all the time. How can one make sure that the philanthropical gifts that are made are actually you're lying up on other people? Look, there's no greater example that and the Warren Buffett, very very very complex individual, and he basically says that I am the warm buffet investing. I'm

not the warm buffet of charitable giving. And when the time comes to get away my money and I will give it away. I want the warm buffet of childboll giving giving it away. I think he went to Billy Wollnda Gates. He said, look, you're a lot younger than me. I trust you. I really get my jollies by making it. Not because I'm greedy, because I like to make investment decisions.

I don't much care about charitable activities. So if you leave Microsoft and spend full time on chardable giving, I'll take my sixties seventy billion dollars and put into the Bill of Milinda Gates Foundation. I mean what you and Bean does that? You know that was an amazing gift, he says, I trust Bill millind the gates and that's not my forte. My forte is investing, not charitable giving.

And so, in a sense to answer your question, I tried to make a judgment, just like I try to make a judgment to invest in the right company with the right management, that they have the right motivations and they have the smarts and the skill set in the common sense to do a good job. I'm trying to support those organizations that I think have a common interest of common gold with a person I'm investing that responsibility and has the same passion about it then in their

organization and I have in my business. So Jennifer Rabb, president of Hunter College, worked me out with pretty good and then went up giving twenty five million dollars to Hunter. Uh My mom went the Glenn uh Hubbard of Columbia Business School has worked me over nicely, and I've given him thirty three million dollars. And you've also, in doubt, you've done more than just that. You've in doubt chairs you've given scholarships to them. You have a very extensive

relations Clumbia. They're not shy and asking. I told cool that I totally administration of Columbia that they order to basically give a few leaps out of their book to the u J. A u J is notorious, Columbia is maybe even better. Really that that's fascinating to hear. So, so you mentioned a little bit about you invest in gate philanthropy, the way you investigate stocks. Let's talk about

that a bit. What what is your process? How do you identify and evaluate a given stock prior to making We have a team, you know, and I am just one member of the team, but I generally would say that we have seventeen analysts. It's their job to mind the areas of expertise that they focus on and to capture profits out of the market. So the analyst job

is to propose. And we have a stock selection committe OMEGA that disposes, propose and disposed so the analysts, so that bubbles up and then this committee and his report proposes the idea of the stock selection committee which consists of co directors of research Steve Ienho and Vice Himan the firm, myself and a couple of the senior macro people, and we vet the idea and every report is required to have price objective in the recommendation of downside risk

um and if we buy the stock, it's simplicitly we've accepted the return and risk profile. After stock declines to the risk point or below, the analyst becomes a secondary input into the decision making going forward, and it's taken over by what we call the cesspool committee, you know, with a cesspool where that's all the junkos and so I chair the sesspool committee, and we'll bring in people from the outside to help us vet the idea. UH, and we can decide either to double down meeting average

down in the position. Do you do that? Often? Does that happen for it? It varies. At times we sell, at times we just sit patent. At times we basically double down. And it really depends upon the characteristic of the company, the diving in the yield, the asset value of the multiple, what the overall market is doing. You know, a rising tide, lifts of ships that we've seen tide loads of ships, as I said before, And sometimes stock is down because of the market and you want to

separate out the noise and um. So we we have, like I said, invest in policy committee that sets policy for the farm. We have a stock selection committee, that responds to the analysts. And then, of course a certain amount of the activity is top down, where I would or Steve iron Horn or other people on the policy coming would have an idea about a sector and we would go to the analysts and asked them to look at a particular area. So now let's talk about a

stock that's working out. It's it's one decision when you're buying something at X, and now it's down ten or and very different. It's very difficult if you're a value investor. If you like something at ten, you should like it more to nine or eight. But there are those times where something is tangibly changed and the circumstances have changed, and you've got to make a different decision. So the way I'd like to answer the question is we sell.

You know, a typical question from a consultant that comes in your shop, what is your cell discipline? Okay? And I say we sell the stock for one or four reasons. The first and the highest quality reason is we board a stock at X. We thought it was worth X plus thirty or forty, it goes up thirty percent, nothing has changed, we sell, So even even once it hits your price, objective even if there's no change in circumstances. If there is no change of circumstances. So give you

a perfect example. I bought twenty five million shares of Bosting Scientific in between five and six dollars a share. We thought it was worth twelve or thirteen. It got there. We didn't see circumstances that change. We saw unfortunates a mistake. But I think it's about eighteen and nineteen now, okay. But so the first reason, just generically is it is always a full sale or is it ever well, let's sell half of varias. It very again depending on the company,

depending upon the characteristics. And look, I believe in looking at charts. You know you do, Bob, absolutely is what are the ingredients? Because I think the stock markets are

highly quality leading indicator. And you know, often times when it comes in kind of that with bed earnings of stock was down we before the earnings, and they come away with blow where your earnings of stock is up before that, and the market has a way of knowing there's some secretary typing of breast release for some CEO who's got a cousin or got a wife, who's got a relative or whatever. So there's a discounting mechanisms out. Yeah, exactly. So you're not we would never consider you a techno

analyst or chartist. You're not making buying cell decisions based on because Doug said. Doug cass said, asked Lee if he's believes in voodoo. No, we are deep dive fundamental investors. We work hard to developer information. But I'll look at a chart because the confirmation of what you think and raised the question when the truck's going the wrong way? You know, because again, the stock market is a leading indicator, and so stocks tend to give you some indication of

what's going on. So the first reason we sell the stock, which the highest quality. Reason we bought something that X, we thought it was worth something more than X. It it it appreciates nothing has changed. We sell. Second reason we sell something is I tell my guys, stay in gals, stay on top of your companies. Not everything unfolds the way you anticipated. So talk to suppliers, talk to competitors,

talk to companies. You know, foul what's going on the economy, and if you get to sense things are unfolding differently than you anticipated. Let's out before we get murdered. This it's hard to make up two kind of environment. The third reason we sell as we are not the Federal Reserve Board. We cannot print money. So sometimes you develop a new idea that has a much better ratio of

reward to risk than something you currently own. So we'll rotate out of something that has got more modest attraction to something that we think has greater attraction. And the fourth reason we sell is we change our view of the market. Okay, and you know you could deal with futures or options for a while. But the end of the day, if you go off bullish to bearish and you want to take your exposure from ninety your arm present down a fifty or sixty percent, you gotta sell inventory.

And so you sell a stock because you want to get out of harm's way. And we did a poor job in two thousand and eight because we missed a significance of Lehman. But by a law, those are the four reasons we sell. Price appreciation hit our target, we get out. The second is things are not unfolding. Is we anticipated it out before you get murdered. The third reason we sell as we found a new idea better than the one that we have in the fourth reasons we've changed our view with the market. We want to

reduce exposure. That's quite fascinating. Do you generally you mentioned a little bit of hedging. Do you generally hedge? Because from what I've been looking at, you're pretty much. I would say we tend to be long oriented, more long and the typical hedge fund, which has served as well the last five or six years. UM. I would say that our short positions range from five to fiftent to the fund. We do not run a big gross book

and a small netbook. I found it very difficult because we tend to want to know our companies, so we have about ninety positions at any point in time. We have seventeen analysts that divide seventeen. I'm asking my colleagues and the five or six companies better than somebody else, which means we had that luxury of knowing our companies really well, which I want you know. Uh. Wall Street has changed from the time I was on Wall Street today.

Wall Street has become a distribution business. Okay, sure they would like you as their client to make money, but their primary objective is distributing securities and also the regulatory environment appropriately has created a level of playing field, and they'll give you the information when they give it to everybody else at the same time. So we really want to do our own research. And Wall Streets large become an access and underwriting business. They'll have conferences and seminars

and managing meetings and they'll provide access. Luckily, we're large enough to get access in our own but we do go to all these conferences and that's what wall Ster is helpful. And then they underwrite securities and if there's something we're interested in, we would hope to get a good allocation. We tend not to be flippers. We tend to be investors, uh, and so by having a good relationship with Wall Street, we tend to get good allocations where we're interested. We don't to slip deals for sake

of flipping deals. So you mentioned your investors not flippers. Typically, how long do you not not even syndicate or I p o s? But something that your team finds that you're enthusiastic about, how long do you have not an asset base is taxable, so you know, we try to go a long term and we actually have a tax advantage fund where we represent we go a long term. But I would say seventy inventory is made for investment with the horizons of over a year, not quite the

Warm Buffet horizon, which almost as permanent. But I respect and admire that. You know, most people who miss really Buffett's record and they criticize the under before this year or he's in line with you. Remember, all I heard was this Warren Buffett guy. He's done his best years of behind and this guy's a different You know, Warren Buffett's record is great pretax. It's better than great aff attacks because m yeah, you know, he's not looking to buy this year's hot stock, flip it out and by

next year's hot stock. He's looking for after tax returns. And I forget the annual meeting, the annual report year maybe twenty five years ago, maybe even thirty. He showed an example if you had a great money manager that but this year's hot stock made fift and sold it, and what yester next year's hot stock made fifty and

sold it. Where you found a great company that was a great investment, held it for twenty or thirty years and made fifteen percent a year, what did you have as attacks at the end of thirty years was thousands of times different. The flippers giving up a third of thet of his prophecy, which I could be a discipline and him. Unfortunately the business and client a man don't allow completely for that. But we're sympathetic to that. You know, we've seen the holding period shrink and shrink and shrink,

but it sounds like you're still longer than many. I would say. You know, in two thousands, I remember my investors, many of my investors coming to me and said, Lee, you're doing very well. We're making a lot of money, but we really don't want to pay the taxes. Do you have anything tax advantaged? I said, Jesus, that's music to my years in the largest investment Omega. I'll tell you what you know. And I'm not just not a commercial.

I'm not looking to investors. I said, if you give me a three year commitment period, Okay, we have three year commitment period, I'll give via one in fifteen conversation scheme and five percent hurdle rate. And uh, if something happens to you the investor in that three period, you're

stay can get out immediately. If something happens to me, the money manage and you want to get out, you can get out immediately and represent for that package seventy five percent more of the games will be long term capital gains. I believe in memory and I think it's pretty accurate. We've beat in the SMP by thousand basis points and a hundred percent of the games a long

term capital gains. And that's for people that are tax sens So let's go over that one in fifteen versus because we had allowed to be we raised it maybe five years later to one and half in twenty. Still have a five percent hurdle rate meaning what meaning the first five percent we don't get compensated on in terms

of incentive. There's no doesn't count. Yeah, it's twenty above the five and I think we beat the SMP by a moment with a thousand basis points in that period well spent over a hundred percent of games with long term capital gains. The best way to understand the product is we buy a stock. Okay, we intend to hold it for a year. Sometimes you get a gain much more quickly. They appreciate to a sell point more quickly from regular fund. We don't represent tax efficiency will sell

it for this fund. We we'll do is use options to age the position to go long term, so you put a collar on it, or you just marry it put to it, or well will put some basically increasing the long position, will sell calls against the position until we go long term, and you have to sell calls that are slightly out of money to avoid stopping the holding period. There's certain I risks require to make twelve full months. That's fascinating and that sounds like that's done

really really well. It has is what percentage of your assets are are in the tax advantage? That one product is probably about eleven percent of our assets alright, and spargaining in the Western world away. It sounds like it's based on the performance plus the the admendation fee, that that hurdle is something that that's not very typical in a low return world. It's uh, it's a significant benefit to the investor. There was I think probably the markets

adequately priced to day that I would be had. I would think the market if it gave you six to eight percent including dividends over the next five years, that would be a good return. And so the idea of not getting compensated for the first five percent is a pretty significant benefits sure to say. To say, at least you mentioned um Warren Buffett not too long ago you took a trip to their annual meeting. Yeah, I did, uh tell us about that. Well, I look, the guy is,

he's the man, right, he's the guru. I didn't learn very much because if you study Buffet, you know one are the things I did this and that. We're going back thirty five years ago. I was the guy at Goldman Sachs that used to send them around Warren Buffet's annual Report to all my partners at Goldman Sacks and keep. But I and this guy, he's gonna be famous one day, good good call. This was well before Goldman had that special relationship where this is way before two thousand and

eight where warn't invested directly in the firm. So I've always had a very high regard from my read as annual report cover to covered. If you read as annual report cover to cup, you don't have to go the annual meeting. But I went to the annual meeting because in part Columbia asked me to speak at a dinner the Friday night before the annual meeting at dinner. But

you know the managed to be admired. There's no person alive and the invest in business has more quotable lines than Warren and his record is unbelievable and you have to admire respect the guy. Um, So you flew to a recent meeting with a rock star collection of people, Um, Doug Cast, Marty Cohen, Steve Roth, Harvey Eisen, Miles NDL. What was that was? Was that a recent trip or that was a connection with the annual report, the annual meeting? And what was that crew like to to go to

bar show? Look Dougs catalytic, bright, thoughtful guy, Harvey Eisen, Uh, different character but also thoughtful. Steve Roth is a major accomplished guy. Rety that's a monster company each success. Uh. And these are all in you know, interesting individuals. Miles and del also is a self made guy h MC NBC partners and I've done extremely well over the years, um. And you know, each individual has their own strengths and weaknesses.

And Uh, I like learning from people, listening to people and seeing how they respond to my questions and that makes life interesting to say the least. Um, So let me let me shift gears a little bit on you. Um, let's talk a little bit about books. One of the things Buffett and short conversation, because you're all you're reading so many a book every day, but reading a book of reports from my seventeen analysts. Um, you know, I wish I read more. I'm very proud of my oldest granddaughter.

My god, she reads all the time. Fabulous writer. But book reading is not my major suit. You're drilling down into company reports and researching for Financial Times, the Wall Street Journal, in New York Times, research reports. You know right now, I'm reading books about prosecutorial abuse, and you know, having received the subpedia that I got to deal with and be mystified by what the government is thinking about. So do you talk about it? I was gonna say, well,

I don't think we really can discuss that. I don't think your lawyers would be happy. Well, we told that investors is that there's nothing wrong. We've been done. We've responded to the subpoena and the government, and the government is analyzing the response and we're quite comfortable. When the analyze the response they'll see that nothing wrong was done. We do our homework. We worked very hard. We do fundamental research and that and that is that. So we'll

leave that, uh, that that question alone. Um, you mentioned one of the professors at Columbia as a mentor. Who who else we were some of your early mentors. You know, you're you're learning a lot of different things with a lot of different people. On the trading side, the guy that was a major name and institution in his own right, Bob Manusian, was in charge of trading, uh Goldman Sachs. Unusual at that time. A Yale graduate ran trading at Goldman Sachs. L J. Tannembaun who was deceased. The Bob

is still very much alivee thankfully, a great guy. L J. Tanneman ran arbitrage. Gust of Levy. You saw him in action. I worked directly with him on a number of assignments. He passed away in nineteen seventy six. A real dynamo man got into seven o'clock in the morning, kept two secretaries busy. There wasn't a charity in New York that he did not work with in support and help. And so you learned about chadbl instincts giving back from people

like us Levy. John Whitehead was deceased John Weinberg a Screenberg. You know you just watched people in action and uh, you know, um, you learn and you and your mature yourself. I have a family foundation I set up I think in the and that long ago. Yeah, well when when when when my income started to exceed my course of living and I started to build up savings, I was really committed to give back. Um. And again, as I said before, I don't want to picture myself as being

different than anyone else. The guys that are in my category all have a similar view, you know. Uh. I have a great admiration for Canlan gown Stand, Drucca Miller, Michael Steinhardt, Um, Bill Ackman, John Paulson, uh and Dan Loeby. I apologize with peopleho name I left up? Is there so many of them that are giving back, that work hard because they have a professional instinct and take the financial success and share what others less fortunate. So I

shouldn't mention I'll open up a Pandora's box. But I got quoted recently negatively towards Hillary Clinton. And it wasn't negative about her necessarily as a person, but you know, comes out of the box and uh kind of criticize and craps all over hedge funds. I don't see this, you know, pitting against the one percent, I don't see it. You know, the nine to one percent are not victimizing. Most of the one percent that I know are giving back and trying to create a better life than um.

And so why why criticized hedge funds when, particularly in our case, she hangs out with them, which is goes to Montha's vineon in the hand, not afraid to ask for donations from from Wall Street. That's been her to the Clintons. Certainly they want to advocate the higher taxation and things like that. That's fine, that that's a different that's a policy issue. And I was I've been quoted now for seven years. I've said that the idea of

the income being carried taxes carried interest is wrong. My income is a special exemption that if you are running a private partnership like a private equity or hedge fund, you're paying a lower tax rate. Now, they should not pertain to my income in managing the business. It should pertain to my income as an investor investing alongside of

my other investors. And for some reason the government has not been focused on that, just like I think that there's a lot of efficiency to be gained that we have a Department of Education at the federal level, cabinet level, that's over a hundred billion dollar department. I don't think we have to spend a hundred billion dollars for the federal government to tell the state and local governments how

to educate their children. That might have been the case fifty years ago, and segregation things like that, but I don't think it's today. How much of that budget is just them dolling out money to different states, I honestly don't know the number. I don't want to be like the fello from Texas, Uh say the four things MoMA oops oops, Yeah, but the four reasons we sell a stock? I remember the four reasons. Well, that that's the area you focus on, So that would that would certainly make sense.

So when we look at issues in society of income inequality, your perspective is the wealthier doing at least amongst Wall Street, the people you know are contributing a lot to charity. It's very complex. You know, the President understandably would like to narrow this income disparity. I would like in narrow the income to how do we do that? Well, I'm an economist, you know, but I think you have to do through education, by improving the skill set of these youngsters,

by giving them a exposure to improving themselves. I look at my own situation, you know, it's my college education, it's my NBA Columbia that literally changed my life, changed my whole income prospect. I mean, I left Xerox making seven thousand dollars a year. I go back to business school getting the m b A. And I hired into Goldman at five hundred, which is a substantial was doubled my income by going to business school for thirteen months.

There was a tri messed deals. I went right through the summer because I couldn't afford to take time off six months old kids and I had to make a living um. And so it's education. It's getting into the home to educate the parents, to motivate them. I mean the Jews of a hundred years ago today or the Asians who who really pushed education. Each wave of immigrant has their own focus on education. Test and I think the wonderful thing in this program the Kopman College scholes,

when the kids showed up with their parents. You know, it was wonderful to see, you know. I give money to a South Bronze educational program called the South Bronze Educational Foundation. And I think seven year, eighty percent of the kids have never met their father. Really, and I look at the and I appreciate the significance of my father in my growing up. That these kids have a

terrific disadvantage. And so I'm trying to create equal opportunity through my charitable efforts, uh by giving them a platform to achieve an education where they have the aptitude and the willingness and the desire. So so you're willing you support getting rid of that carried interest for the income side, not the investment side. What other policy changes do you think should we look? I was beginning to develop a thought.

The irony of the whole thing the last five or six years is uh Bernankee wanted to create economic growth and employment, and he figured out the best way to do that is to create wealth, because wealth creates consumption and consumption creates jobs. So he said, the way I'm gonna do is to get the stock market up to create wealth, to create consumption, to create jobs. The trouble is is a mald distribution of the ownership of stock.

So guys like me have benefited mightily. And because we've had this gridlock and government where the Republican the Democrats don't seem to get along and the President can't seem to unite them, we've not had phisical policy initiatives designed to go along with the monetary initiatives. So the entire burden to deal with the recessions for in monetary policy.

Maybe we should have a jobs program, maybe, Uh, infrastructure that normal posting back all this retained earnings that sit offshore and bank accounts doing nothing productively bring it back and attacks howiday tie to hiring and infrastructure development to take this big collapse in the price of energy. Uh, put an energy tax on design to infrastructure building. We don't seem to have the fiscal initiatives. And I'm not

blaming the president. Okay, I blamed the President for some of his dialogue on you know, class warfare and stuff like that, but that was an old story. And I got ordered by virus by president basically just a Coincidencely, I hope, so that's nothing let's over to do. But I think we need a better coordination of fiscal monetary policies, and hopefully in time we'll get it. But we don't,

we'll get head it to a disasters. We really haven't seen the normal fiscal stimulus that you get following forget an economic crisis following a normal deep recession, when it's just hasn't been following on the heels of monetary policy exclusively. So it's all it's all that, all right, So let's keep let's go through. I only have you for a few more minutes, so let me ask you some of um the standard questions I ask everybody, and they're they're

always always generates some interesting response. Um. So you mentioned you start really early. To take us quickly through a day in the life of Lee Cooperman, You're you're up at five in the morning, at the five ten. I leave my house at a proixing five, depending upon traffic, I come in from suburbs against the officer si. Um and uh, you're there for twelve hours until six o lea about you know, depending upon the time of my dinner. I leave the office between five. I have to leave

tonight at five. Story have dinner with a client at six o'clock. Meeted a restaurant last night, had dinner with the company. I met the company at six. I got finished with dinner at eight and went home. Um, and I get home, I take a shower, and I logged into a Bloomberg not paid commercial. I love into my Bloomberg terminal. He's the most powerful terminal out there. But by the way, during this entire interview, and I'm not exaggerating,

you've been checking stock prices. People don't realize you're multitasking this whole conversation. Yeah, well, I'm not making investment decisions. Of course, I'm trying to see what But you have an eye on what's going on. Even throughout this conversation.

I would say, I'm pretty plugged, pretty obsessive, excessive, obsessive, compulsive. Um, So you go to dinner and then go home, my shower, and I logged into Bloomberg terminal and see what's going on in China, what's going on Japan, what's going on the euro dollar, what's going on in the dollar yen? And see what the headlines are, And uh, this is my life. You know, it's it's you know I said earlier on but you know, do what you love, what

love what you do. You can't possibly work at this pace and this engagement if you didn't like what you did. My wife tells people that I'm gainfully unemployed. I get paid for doing what I would be doing for free anyway. And you know that that's difference with me. And retirement would be one word, and that one where would be investors. If I did not have investors, I would be doing exactly what I'm doing now. But I probably couldn't afford.

Not probably I couldn't affords. I'm too cheap, basically afforced. No, I say it seriously. You know, I joke with people. You know I have a home in Florida. I spent a lot of time in Florida working, and I have two cars in Florida. I just put my second car and floor. I have two cars in New Jersey. My first three cars with two thousand twos, two thousand and two Lexus convertible with two thousand two Alexus Sedan, two thousand eight Lexus oh wheel drive sedan, and I just

bought a used Volkswagen facade. But I feel like a rich man. Why it's the first three cars preceded Bluetooth. My new car used with thirteen miles wokes Away inside his bluetooth. So I get into the car and I feel like a rich man. I say, call Billy Gordiano at work and it does, and it does. My other three cars I can't do that, So I feel like a rich man. You know you can. You can replace

those old cars. And by the way, the newer cars, the safety technology, the lane you know, they stop automatically. I don't drive a lot, uh. And I'm told in a two thousand and two Lexus LS four thirty, with the best Lexus they made, I got eighty thousand miles on it like a new car. It drives like a new car, and I'd rather give the money to charity. So that's what I was about to say, is you know, people, you describe yourself as cheap. But again going back to

and say cheap, I respect money. I'm not going to tell you how much I give away every year to charity, but its millions of dollars and I don't spend that kind of mone in my cell boast. You know you'd rather give it away than buy a Nu mercedy because you know it's the end of the day. I don't play so much value in that. I don't. I don't want to give anything. I don't deprive myself of anything. If I want something, I buy it because I could afford it. But there's nothing that I really want I

don't have. You're not, you said earlier, and you're not. I'm not. I'm not a clothes horse obvious reasons. I'm overweight and you know, uh so I have the clothes I need. You're in a suit and tie, dressed nicely. I dressed properly. I dress adequately. Though a guy I laughed, I got you know, it's a funny story. Yeah, um, Anthony Scaramucci. Sure. He said publicly somewhere that I was the worst dress billionaire he hasn't met, And I said to him multi he jokes about that all the time.

I actually think I'm pretty well addressed. You're well put together. Your wife picked out the tie. Though I know my wife. He leaves me alone. I'm I Actually I'm building a new house now Florida, and my wife sees everything to me. Really, my uh my wife basically knows what she's interested in, and she pursues what she's interested in. And uh, very purposeful purpose and very very smart lady, terrific wife. That that sounds fantastic. So um, we mentioned your your mentors,

We mentioned some of the investors. Actually we didn't get any other than Buffett. What other investors have influenced your approach to invest Roger Murray, Warren Buffett. I mentioned Bob Minutia and Geodd Whitehead. I mean all in different ways. You know, Bear Sterns was notoriously positive firm and with charitable instincts, and so you pick up different things, and then you watch different investors, and I'd say it's the process of learning. I can't I can't point to anyone

individual that's changed my life on the industrial side. The guy that I had the greatest admiration for where I spent really first twenty five years of my life studying, was Dr Henry Singleton, was a founder of tel Dine and arguably the smartest guy I ever met. Really absolutely and uh, basically uh. I have no greater authority to that view than Warren Buffett. In two thousand and seven, he gave a speech at the Value Investing Conference on

two subjects. One was I was highly critical of stock repurchased the way it was being um um, you know, practice of time. And then I went through a case study that used at Harvard UH and it was untiled. The financial brilliance of Dr Henry Singleton of tele Dine. Warren Buffett got ahold of those two presentations. Not by accident. I sent to him, having great respect for Warren's And

there's a letter he sent me. I hope he doesn't mind them reading it publicly November twenty thousand and seven, and he said, dearly, I don't think you could have picked two better subjects, Henry. That's Henry Singleton has a manage that all investors CEO would be CEO s and NBA students should stud In the end, it was one rational and there are very few CEOs about whom I

could make that statement. Paragraph the stock repurchase situation is fascinating to be that's because the answer is so simple. You do it when you are buying dollar bills and click cutting significant discount, and only then underline only paragraph and the general observation. I would say that most companies that repurchase shares thirty years ago, we're doing for the right reasons, and most companies doing it now are wrong.

When doing so time of the time, I see managers who are attempting to be fashionable or subconsciously hoping to support their stock. Lows is a great example. I use Low as an example of a good buy back program. Lows is a great example of the company's always repurchase shares the right reason. I could give examples the reverse. I love this following statement, but I follow the dictum praise by name, criticized by category, best regarded warrant. I showed that letter to my two older my two sons,

and it's a great philosophy of life. You never see warrant criticizing any one individual in public. We might criticize invest in bankers and criticized hedge funds, but it doesn't go after anyone. That's a good philosophy of life. In my opinion, that's a fascinating What's the date on that letter? That data on that letter was November two thousand and seven, So here it is eight years later. We see a massive run of buy backs the past few years. What

are your thoughts on these are are buy backs? Are they buying dollar bills at a substantial discount, or they being fashionable? There are four kind of buy backs that that's a theme four of everything. It sounds like, well quinciense bibe back type one has nothing, and I'll give

examples nothing to do with fundamental value. Remember in D and ninety four, being on the chowel line at the Allen and Company media conference, standing behind Andy Grove, and I said to Andy, what statement is Intel making my buying back stock at fifty times earnings? He says, We're not looking to make any statement. Basically, Uh, we don't want the flak from the shoreholders over option creep. So with I'm back enough shares to keep the up the

share count flat. Second kind of buy back very nefarious. The one that warrant to sends the reference. That's managements that are looking to either support their stock or create this impression that's undervalued or married maybe even creating a conditioned market where they're buying backstock for the company their

selling stock themselves. I'm not going computing them, but you know, Andrew Mazzolo has spent so several hundred million dollars worth of stock at forty while country Wide Credit was buying backstock at forty two billion dollars worth, only to sell the company to Bank of America at four, and I'm telling you back in America is very sorry they bought it it for. Okay. The third kind of buy back, which is the typical buyback now, is companies that blessed

with excess cash flow. They've kind of convinced themselves that dividends forever. We don't want to be embarrassed by having the kind of dividend we could always turn off a buyback program. So we're gonna take excess case flowing buy back stock. And I would you rather see those folks doing a higher dividend than many cases in many cases, okay.

And the fallacy of that is that the average Carmon stock is yielding, uh, you know, two percent for every shore you buy back, your buying back fifty years of dividends. And it turns out that a dividend policy was the wrong policy and cut the dividend, your stock doesn't get cremated anyway. So look, look, I mean, I have enormous

respect for Goldman Sacks. Goldman Sack sports stock back for the Treasury over two hundred and two thousand and seven only sell stock to warm buffet and under eighty if you propably account for the warrants, and all the banks and financial institutions and some of the old companies with

buying back stock are totally inappropriate prices. And the fourth kind of buy back the one I love, the one that Henry singled him did the eight self tender offers made retire nine of the company stock and there was a billiont executed. Program is they understand the value proposition of their company. They can correctly determine their stock is under valued and buy back under badge stock. They leverage

the return to those investors that aren't selling. If what companies have to you know, understand is when you buy back stock, you're lodging the ownership of those who are not selling. If you're lodging the ownership but those not selling your disservice. You're investor by buying backstock and inappropriate prices, so at the right price at the right place. I love it. You know, it's funny you mentioned the goldman

Um situation. Uh Dell recently went private, and before they went private, we were looking at some of the numbers. It turned out, over the course of their entire history, they spent more on buy backs than they actually earned in profit. I have I don't want to get into a debate with Michael Dell, but I have a very negative view of what they did. That carl I com was on the right track in a sense. Going private is a giant case of instruy trading by managing against

their shaholders. Okay, uh. I would have thought it would be more appropriate for Dell to recapitalize the company, making an offer to shareholders, take out those showers they want to go out and those shareholders that wanted to take the risk of a more leverage enterprise, and bet on Michael Dell's management team and his own talent to improve the situation. That would a fair a way to go.

So three years from now when he fixes it up and creates a normal capital game for him in silver Lake and tried to bring it, Yeah, that was gains that were really belonging in the pocket of the investor. The investor. So you mentioned carl I Con. What do you think of activist investor. I would say I'm balanced positive, you know, I think there's some negative aspects to it.

I think this formula go out and borrow a lot of money, leverage up a couple of turns of debt, capital and buy back a lot of stock is not suitable for every company, but buying Lodge, I would say activism has to be viewed in a constructive light. And he's been totally brilliant the Netflix trade also, and the guy has got a phenomenal record. He's only to be admired and respected. And um, what sort of advice would you give to millennials or someone just starting out their

career today? I think we covered some of it. I mean, uh, I look at my situation. Uh coming fore I came. I think education, it's important if you're interested in the business world. I think, uh, get a good business education. You know, accounting is the language of business. So my NBA made a all the difference to me in terms of not only could open up doors, it gave me technical skills. They didn't have a major in the chemistry, mind and meth and physics. Uh. And don't go into

a field just for money. You know, all these kids interviewing they could join hedge funds. Everything is cyclical. Figure out what your aptitude and your interests are and pursue that career and go to work for somebody respect and admire. You know, it's very important and you get a good foundation. And then our final question, and I asked this of all my guests, what do you know today about investing and asset management that you wish you knew forty years

ago when you started. I loved my career at Goldman Sachs. I owe a great gratitude to Goldman Sachs. I think Goldman Sacks owes me. But I performed very strongly as a professional. But I probably would have gone into this business earlier. What I did you wish you would have started earlier? Now it's a chicken and egg. You know. I developed my reputation at Goldman, but this is a

much more p off of the hedge fund business. You had fun business, but you know, and you have a lot more control when it's essentially you at the top of the part. Your hoppers are higher down as are lower. You know, you're out there alone. And I do have a team that I have a very competent team, But the truth is I didn't have the same infrastructure I

had a Goldman SAX. You know, I was the number fifty partner made was fifty partners in total, five hundre employees, and today is thirty eight thousand people, I think in four hundred, that's an amazing that's an amazing set of numbers from five. So now when you're a partner and you leave that partnership and have to digress briefly because you brought this up, are they buying you out of the partnership? How does that a capital We were a

private partnership. You have a capital account. The firm had a very strong capital retention rules. When you retire, they gave you half of your capital back. The other half

you got back after five years. So I took the amount of cap I can get a go home in, plus whatever else I had, and I put into Omega and I started Omegan and that number has grown, uh something like that, not too chevy, and uh, that's because I believed in myself and I left my money in and I want to be a co investor with my investors. I want to eat my own cooking, and so I believe in that very strongly. And so I lost more money than anyone lost in two thousand and eight, and

I've done extremely well subsequent to that. And I think that's the that's the alignment of interest that should exist. Lee. I can't thank you so much for how generous you've been with your time. Um, this just has been tremendous. Uh. You've been listening to my conversation with Leon Cooperman of Omega Advisors. If you enjoy this conversation, be sure and check out an Inch above or an Inch Below on Apple iTunes to see all the rest of our various shows.

Check out my daily column on Bloomberg View dot com. Follow me on Twitter at Ridholtz. You've been listening to Masters in Business on Bloomberg Radio