Billionaire investor Leon Cooperman outlined 11 reasons why he's concerned about coronavirus' long-term impacts

• Hedge-fund billionaire Leon Cooperman detailed 11 reasons why he's worried about the long-term effects of the coronavirus pandemic.
• Cooperman is concerned about tougher regulations, tax hikes, soaring government debt, and a sluggish recovery in demand, he said in an email shared with Business Insider.
• The investor also flagged Warren Buffett's inactivity in recent months, saying that if the Berkshire Hathaway boss isn't doing much, "who am I to be bold?"
• Visit Business Insider's homepage for more stories.

Billionaire investor Leon Cooperman has a laundry list of worries about the long-term impacts of the coronavirus pandemic.

The Omega Advisors boss flagged 11 potential consequences including stricter regulations, higher taxes, and slimmer corporate profits in an email to other investors that he shared with Business Insider. He also pointed to Warren Buffett's recent inactivity as a reason not to be too bullish.

Here are Cooperman's 11 concerns:

1. Capitalism "will likely be changed forever" by unprecedented federal interventions to buttress the US economy against the pandemic. "When the government protects you on the downside they have the right to regulate the upside."

2. Politics are shifting to the left and taxes will rise, "quickly if Biden wins and more slowly if Trump wins."

3. The Federal Reserve has cut rates to almost zero to offset the pandemic's impact, and low rates indicate an ailing economy.

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4. US government debt is growing faster than the economy, meaning a bigger chunk of national income will go toward repayments.

5. Demand may not fully rebound for more than a year, as people will need proof that they've been vaccinated against coronavirus or are immune to it to attend sporting events, concerts, and other gatherings.

6. Companies will face higher costs to comply with a new wave of worker-safety requirements.

7. Many businesses will join United Airlines in issuing equity to replace the capital they've lost in recent months, diluting existing shareholders and pulling funds from other opportunities.

8. Share buybacks, which have lifted earnings per share in recent years, will be less common following the recent backlash.

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9. Corporate profit margins will retreat from historic highs in January.

10. Bonds and other credit assets are cheaper than stocks.

11. Warren Buffett "sold airlines into weakness" and "doesn't seem to be too active despite his liquidity," Cooperman wrote. "If the greatest investor in my generation can't figure it out, who am I to be bold?"

The "bottom line" of Cooperman's email was that he pegs the S&P 500's fair value at 2,550. The benchmark index is currently about 10% above that level, and slightly above his upper target of 2,800, suggesting it's overvalued.

Read the original article on Business Insider