Leon Cooperman And The Misplaced Meritocracy Assumption

I should refrain from writing satire about “legends” of the investing universe.

It’s probably gratuitous, and I’m not convinced I’m adding much in the way of value. Then again, I’m occasionally reminded that there’s no value like comedic value. I suppose that’s another way of saying laughter is the best medicine.

Some of the best satire I’ve ever penned centered around Jeff Gundlach. One trader whose name most readers know still insists it was the best content ever published here. That may be true depending on your definition of “best.” But the jokes were too “inside-baseball” for wider audiences to appreciate, and I quickly discovered that the vast majority of everyday investors actually revere Gundlach. Many pros hold people like Stan Druckenmiller in the same regard.

I think that’s (very) unfortunate. It never really occurred to me until I started writing for public consumption (and thus getting feedback) that grown men and women literally idolize these guys. I was, of course, aware that all aspiring uber-capitalists are taught to “invest like Buffett.” But being 13 years old and worshipping the financial exploits of Nebraska’s most famous grandad is something entirely different from being 43 years old and singing the praises of another grown man. The latter is… well, I don’t want to be gratuitous. Suffice to say that, in my opinion, people should grow out of hero worship when they become adults and reserve their reverence for people who dedicated their lives to something other than making money or playing sports or building hotels.

That, in brief, is why I can’t resist satirizing the “legends.” They’re not “legends.” Plato is a legend. Marcus Aurelius is a legend. Leonardo da Vinci is a legend. Ludwig Wittgenstein is a legend. Mother Teresa is a legend. Albert Einstein is a legend. Stan Druckenmiller is just some guy. Sorry. (Not sorry.)

Some famous investors are more palatable than others, of course. Druckenmiller is ok in that regard. Paul Tudor Jones is bearable. Buffett is just Buffett. Charlie Munger is what happens when Warren’s Venom symbiote comes out.

But some of them practically beg to be lampooned. Take Leon Cooperman, for example. Cooperman’s public remarks are often flagrantly abhorrent. God only knows what he says in private. He’d probably be in jail if eliciting incredulous eye-rolls were illegal.

Throughout the Democratic primaries, Cooperman regaled the nation with some of the most patently ridiculous anti-Progressive rhetoric I’ve ever heard outside of social media. In October of 2019, for example, he accused Elizabeth Warren of “sh–ting on the f—ing American dream.”

On Tuesday, Cooperman weighed in on the long-term outlook for stocks. In the process, he slipped in a chapter from his life story.

“In terms of my long-term outlook, to be honest with you, stocks are the best place to be, but I just wouldn’t expect much from the major averages,” Cooperman said, dialing into CNBC’s Financial Advisor Summit from the closet, where he stores a bulky printer and enough reams of paper to make five copies of War and Peace (clip below).

Leon proceeded to explain why he’s “prepared to be in [the] kind of environment where I have to stock-pick my way to success.”

“You know, I got my MBA from Columbia Business School on January 31 of 1967. I had a six-month-old kid, I didn’t have a nickel in the bank,” Cooperman said. “I was essentially broke. I had no assets, other than my earning power.”

Implicit is a familiar theme: People like Leon deserve what they have because they got it using their “earning power.”

Without missing a beat, he continued: “I went to work the next day at Goldman Sachs. February 1 of ’67. And I made my money picking stocks. I’m prepared to be in that environment.”

To be sure, there are less sympathetic figures than Cooperman, as strange as that might sound given his penchant for playing the role of cartoonish billionaire curmudgeon. At least he made his fortune. At least he did work. (I’m deliberately omitting any and all allegations of unsavory conduct. It’s not my job to re-adjudicate.)

But he seemed totally oblivious to the fact that, for the vast majority of Americans, no amount of hard work and determination will land them in Columbia Business School, and put them in a position to go straight from cap and gown pictures to Goldman the very next day.

One theme I come back to time and again in these pages is the notion that America is not a meritocracy.

Years ago, in the earliest days of the site, I was quite a bit more stylistically caustic than I am today. Over a half-decade, I’ve methodically transitioned to what I’ll describe as “well-informed, opinionated news and analysis.”

What I found out during that transition (which I completed in late 2018) was that I could say almost anything without offending anyone, as long as I was careful in how I expressed myself. A conciliatory tenor combined with an academic cadence and a dash of self-deprecating humor will endear you to pretty much anyone.

The one thing I’ve never been able to say without causing consternation, though, is that American meritocracy is a myth. And yet, I say it. Again and again. The more pushback I get, the more convinced I am that it’s true.

To be fair, Cooperman can plausibly claim to have beaten the odds. Someone like Donald Trump can’t make that claim. The odds were stacked in his favor from birth.

But what too many upper-middle class Americans (not to mention folks like Leon) refuse to admit is that for the vast majority of their fellow citizens, the word “odds” doesn’t even make sense in this context.

To a 13-year-old African American male born into Chicago’s gang scene, Cooperman’s story may as well be a fairy tale. For that teenager, the odds of one day being able to say, “You know, I got my MBA from Columbia Business School on January 31. I went to work the next day at Goldman Sachs,” may as well be zero. The list of obstacles is so long — the hurdles so high — that it’s in every practical sense impossible.

In fact, I’d wager that the odds are (far) greater that such a child gets hit by a stray bullet by the time some new Leon is attending his first Zoom meeting with his new colleagues at Goldman.