Are Equities Still The Best House in The Financial Asset Neighborhood LeonCooperman ValueInvestingCongress 9-8-14

10th annual new york
value investing congress
September 8, 2014 New York, NY

Are Equities Still the Best House in the
Financial Asset Neighborhood?
Leon Cooperman, Omega Advisors
www.ValueInvestingCongress.com
Investment Manager | Omega Advisors, Inc.
810 Seventh Avenue, 33rd Floor | New York, NY 10019 | (212) 495-5200

September 8, 2014
Presentation by Omega Advisors, Inc.

Leon G. Cooperman
Chairman and CEO

10th Annual New York Value Investing Congress

Exhibit 1

2 OMEGA ADVISORS, INC.
Investment Outlook
There is time and price left in this U.S. equity bull market and a respectable
S&P 500 return is expected in the next 12 to 18 months.
Nearly all of U.S. fixed-income securities, with the exception of structured
credit, are uninteresting and unattractive both in an absolute sense and
relative to U.S. equities. This conclusion includes Treasuries, investment-
grade corporate bonds and high-yield bonds. Sovereign debt in other
developed economies are also unattractive.
The equity markets in Europe and Japan should deliver respectable returns
over the coming year.
The dollar should be a strong currency over the coming year.

OMEGA ADVISORS, INC. 3
Length of
%Change Peak to
Peak to Trough
Date Date Trough (months)
Jun 1948 17.06 13.55 (20.6)% 12
26.59 22.71 (14.6) 8
49.74 39.42 (20.7) 17
60.62 52.30 (13.7) 15
72.64 52.32 (28.0) 6
94.06 73.20 (22.2) 8
108.37 72.72 (32.9) 19
119.12 62.28 (47.7) 21
107.46 86.90 (19.1) 15
140.52 102.42 (27.1) 21
336.77 223.92 (33.5) 4
368.95 295.46 (19.9) 3
1186.75 957.28 (19.3) 1
1527.46 776.77 (49.1) 31
(26.3)% 13
1565.15 676.53 (56.8) 17
Source: Standard and Poors and Omega Advisors, Inc.
Post War Bear Market Cycles
Average
Oct 2007 Mar 2009
Mar 2000 Oct 2002
July 1990 Oct 1990
July 1998 Aug 1998
Nov 1980 Aug 1982
Aug 1987 Dec 1987
Dec 1972 Sep 1974
Dec 1976 Mar 1978
Jan 1966 Sep 1966
Nov 1968 Jun 1970
July 1959 Oct 1960
Dec 1961 Jun 1962
Dec 1952 Aug 1953
July 1956 Dec 1957
Jun 1949
S&P 500
Trough Peak
S&P 500
Exhibit 2

Exhibit 3

Date of Date of Recession Real GDP
Economic Economic Duration Growth
Peak Trough (month) (percent)
Nov 1948 Oct 1949 11 (1.6)%
Jul 1953 May 1954 10 (2.6)
Aug 1957 Apr 1958 8 (3.7)
Apr 1960 Feb 1961 10 (1.6)
Dec 1969 Nov 1970 11 (0.6)
Nov 1973 Mar 1975 16 (3.2)
Jan 1980 Jul 1980 6 (2.2)
Jul 1981 Nov 1982 16 (2.7)
Jul 1990 Mar 1991 8 (1.3)
Mar 2001 Nov 2001 8 (0.1)
Average 10 (2.0)%
Dec 2007 Jun 2009 18 (4.3)
Source: NBER, BEA, and Omega Advisors, Inc.
Post War Economic Cycles
Exhibit 4

Date of Date of Expansion
Economic Economic Duration
Trough Peak (month)
Oct 1949 Jul 1953 45
May 1954 Aug 1957 39
Apr 1958 Apr 1960 24
Feb 1961 Dec 1969 106
Nov 1970 Nov 1973 36
Mar 1975 Jan 1980 58
Jul 1980 Jul 1981 12
Nov 1982 Jul 1990 92
Mar 1991 Mar 2001 120
Nov 2001 Dec 2007 73
Average 60
Jun 2009 Current (a) 63
(a) Sept ember 2014
Source: NBER, BEA and Omega Advisors, Inc.
The U.S. Economic Cycles
Exhibit 5

'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14
Monthly Data from 12/80 to 8/14
0.1 0.1
0.2 0.2
0.3 0.3
0.4 0.4
0.5 0.5
0.6 0.6
0.7 0.7
Source: BLS, Bloomberg and Omega Advisors Inc.
Initial Unemployment Claims % of Labor Force
Initial Unemployment Claims as a % of Labor Force
'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
100 100
200 200
300 300
400 400
500 500
600 600
700 700
Source: BLS, Bloomberg and Omega Advisors Inc.
Initial Unemployment Claims
Initial Unemployment Claims 4-week moving average
Exhibit 6

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
5 5
10 10
15 15
20 20
25 25
30 30
35 35
40 40
Source: NFIB, Bloomberg and Omega Adv isors Inc.
NFIB Small Business Job Openings
NFIB Small Business Job Openings Hard to Fill
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
-10 -10
-5 -5
0 0
5 5
10 10
15 15
20 20
25 25
Source: NFIB, Bloomberg and Omega Adv isors Inc.
NFIB Small Business Hiring Plans
NFIB Small Business Hiring Plans, 3-month Average
'07 '08 '09 '10 '11 '12 '13 '14
Monthly Data from 2007 to 7/14
38 38
39 39
40 40
41 41
42 42
Source: BLS, Bloomberg, and Omega Adv isors Inc.
Manufacturing Average Weekly Hours
Manuf acturing Av erage Weekly Hours
Exhibit 7

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Quarterly Data from 89:q4 to 14:q1
0 0
5,000 5,000
10,000 10,000
15,000 15,000
Source: Federal Reserve Flow of Funds and Omega Advisors Inc.
Household Equity in Real Estate
Household Equity in Real Estate $billion
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
0 0
10 10
20 20
30 30
40 40
50 50
60 60
Consumer Financial Net Worth
Households Total Net Worth less Tangible Assets in $Trillion
'98 '00 '02 '04 '06 '08 '10 '12
60 60
70 70
80 80
90 90
100 100
Household Liquid Assets %Liabilities
Household Liquid assets as a % of Household Liabilities
'81 '84 '87 '90 '93 '96 '99 '02 '05 '08 '11
Sav ing - Monthly Data f rom 12/80 to 6/14, Debt Quarterly Data to 14:q1
0
4
8
12
10
11
12
13
Source: Federal Reserve, BEA and Omega Advisors Inc.
Household Debt Service Ratio and Saving Rate
Debt Service Payments as a % of Disp Income (lhs)
Personal Savings Rate (rhs)
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14
Quaterly Data f rom 90:q2 to 14:q3
-60 -60
-40 -40
-20 -20
0 0
20 20
40 40
Source: FRB Senior Loan Officer Survey, Bloomberg and Omega Advisors Inc.
Bank Lending Standards
Net Percent of Banks Indicate More Willing to Make Consumer Loans
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
Quarterly Data f rom 03:q1 to 14:q2
2 2
3 3
4 4
5 5
6 6
7 7
8 8
Source: FRB, and Omega Advisors Inc.
Credit Card Delinquency Rate
Fed Res US Delinquency Rates f or All Bank Credit Cards
Exhibit 8

'86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
Quarterly Data f rom q1:95 to q2:14
2 2
4 4
6 6
8 8
10 10
12 12
14 14
Cash % of Assets
Source: Standard & Poors, UBS, and Omega Advisors Inc.
Corporate America: Very Liquid
Cash as a % of Total Assets f or the S&P 500 excl Financials
Exhibit 9

'47 '53 '59 '65 '71 '77 '83 '89 '95 '01 '07 '13
Quarterly Data f rom 1947 to 14:q2
0 0
1,000 1,000
2,000 2,000
3,000 3,000
4,000 4,000
Source: BEA, and Omega Adv isors Inc.
Business Fixed Investment Below Trend
Non-Residential Fixed Inv estment in $billion
Non-Residential Fixed Inv estment Trend
'60 '64 '68 '72 '76 '80 '84 '88 '92 '96 '00 '04 '08 '12
2 2
3 3
4 4
5 5
6 6
7 7
Residential Fixed Investment as %of GDP
Residential Fixed Inv estment as a % of Nominal GDP
'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10
0 0
200 200
400 400
600 600
800 800
1,000 1,000
Residential Fixed Investment as %of GDP
Residential Fixed Inv estment as a % of Nominal GDP
Residential Fixed Inv estment Trend
'60 '64 '68 '72 '76 '80 '84 '88 '92 '96 '00 '04 '08 '12
8 8
10 10
12 12
14 14
16 16
Business Fixed Investment as %of GDP
Businessl Fixed Inv estment as a % of Nominal GDP
Av erage
'59 '64 '69 '74 '79 '84 '89 '94 '99 '04 '09
0 0
500 500
1,000 1,000
1,500 1,500
2,000 2,000
2,500 2,500
Consumer Durables Below Trend
Consumer Durable Expenditure in $billion
Consumer Durables Trend
'59 '63 '67 '71 '75 '79 '83 '87 '91 '95 '99 '03 '07 '11
6 6
7 7
8 8
9 9
10 10
Consumer Durables as %of GDP
Consumer Durable Expenditure as % of Nominal GDP
Av erage
Exhibit 10

Catalysts to Activate Consumer Pent-up Demand
'90 '93 '96 '99 '02 '05 '08 '11
0 0
10,000 10,000
20,000 20,000
Household Equity in Real Estate
Household Equity in Real Estate $billion
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
0 0
50 50
100 100
Consumer Financial Net Worth
Households Total Net Worth less Tangible Assets in $Trillion
'98 '00 '02 '04 '06 '08 '10 '12
60 60
80 80
100 100
Household Liquid Assets %Liabilities
Household Liquid assets as a % of Household Liabilities
'81 '84 '87 '90 '93 '96 '99 '02 '05 '08 '11
Sav ing - Monthly Data f rom 12/80 to 6/14, Debt Quarterly Data to 14:q1
0
8
10
12
Source: Federal Reserve, BEA and Omega Advisors Inc.
Household Debt Service Ratio and Saving Rate
Debt Serv ice Pay ments as a % of Disp Income (lhs)
Personal Sav ings Rate (rhs)
'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
0 0
5 5
10 10
Source: FRB, and Omega Advisors Inc.
Credit Card Delinquency Rate
Fed Res US Delinquency Rates f or All Bank Credit Cards
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14
Quaterly Data f rom 90:q2 to 14:q3
-100 -100
0 0
100 100
Source: FRB Senior Loan Officer Survey, Bloomberg and Omega Advisors Inc.
Bank Lending Standards
Net % of Banks Indicate More Willing to Make Consumer Loans
'70 '74 '78 '82 '86 '90 '94 '98 '02 '06 '10 '14
Monthly Data f rom 1960 to 6/14
1.5 1.5
2 2
2.5 2.5
3 3
3.5 3.5
Source: BEA, Bloomberg and Omega Advisors Inc.
Non-Mortgage Interest Payments as % of Disposable Income
Non-mortgage Interest Exp as % of Disposable Income
'99 '01 '03 '05 '07 '09 '11 '13
Daily Data f rom 12/31/09 to 8/29/14
-1 -1
0 0
1 1
2 2
3 3
Source: FRB, Bloomberg, and Omega Adv isors Inc.
Inflation Expectations
10-y ear Treasury Yield - 10-y ear Inf lation Indexed Treasury Yield
Exhibit 11

Source: CBO, FactSet and Omega Advisors Inc.
'60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
-10 -10
-5 -5
0 0
5 5
10 10
U.S. GDP Gap
(Nominal GDP- CBO Potential GDP) as a % of Potential GDP
'60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
-6 -6
-4 -4
-2 -2
0 0
2 2
4 4
U.S. Unemployment Rate Gap
CBO NAIRU (Nonaccelerating Inflation Rate of Unemployment) less the Unemployment Rate in percentage points
'49 '52 '55 '58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12
0 0
5,000 5,000
10,000 10,000
15,000 15,000
20,000 20,000
25,000 25,000
U.S. Gross Domestic Product
Nominal GDPin $Billion, SAAR Nominal GDPTrend
Exhibit 12

Recession/Economic Stress Check List
Metrics
Typical Pre-recession/Recession
Reading Current Status
Inflation accelerating stable and below target
Yield Curve inverted positive slope
Inventory/Sales Ratio above average below average
excess inventory to final sales low inventory to final sales
Cyclical Components to GDP significantly significantly
(consumer durable, capex,
construction) above long-term average below long-term average
Employment declining increasing
(Y/Y change)
Initial Jobless Claims 475/650 298
(weekly in '000)
Leading Economic Indicators declining increasing
(Y/Y change)
Profit per Employee declining stable
Industrial Production (Y/Y change) declining increasing
Personal Income (Y/Y change) declining increasing
Output gap peaking stable/closing
Credit Spread widening stable/narrowing
Consumer Confidence declining increasing
Equity Markets declining increasing
Source: BEA, BLS, FRB, and Omega Advisors, Inc.
Exhibit 13

Months From First Fed Funds
Date of Trough Date of Peak First Fed Rate Hike Hike to Equity Market Peak
Sep 1953 Aug 1956 Dec 1954 21
Dec 1957 Jul 1959 Aug 1958 11
Oct 1960 Dec 1961 Feb 1961 10
Jun 1962 Jan 1966 Aug 1963 29
Sep 1966 Nov 1968 Nov 1967 12
Jun 1970 Jan 1973 Mar 1971 22
Oct 1974 Dec 1976 Jun 1975 18
Mar 1978 Nov 1980 Apr 1978 31
Aug 1982 Aug 1987 May 1983 51
Dec 1987 Jul 1990 Mar 1988 28
Oct 1990 Mar 2000 Feb 1994 73
Oct 2002 Oct 2007 Jun 2004 40
Average 29
Jun 2015 ?
Source: Federal Reserve, and Omega Advisors
Historical Bull Market Cycles -- S&P 500
S&P 500 Peaks on Average 29 Months After the First Fed Funds Hike
Exhibit 14


Date of Date of Expansion Date of Market Peak
Economic Economic Duration S&P 500 Prior to Eco Peak
Trough Peak (month) Peak (month)
Oct 1949 Jul 1953 45 Dec 1952 7
May 1954 Aug 1957 39 Jul 1956 13
Apr 1958 Apr 1960 24 Jul 1959 9
Feb 1961 Dec 1969 104 Nov 1968 13
Nov 1970 Nov 1973 35 Dec 1972 11
Mar 1975 Jan 1980 57 Feb 1980 -1
Jul 1980 Jul 1981 11 Nov 1980 8
Nov 1982 Jul 1990 91 Jul 1990 0
Mar 1991 Mar 2001 120 Mar 2000 12
Nov 2001 Dec 2007 73 Oct 2007 2
Average (months) 60 7.4
Jun 2009 ? ?
Source: NBER, Standard and Poor's, BEA, and Omega Advisors, Inc.
Market Peaks versus Economic Peaks
Exhibit 15

2012 2013 2014E 2015E
Real GDP (%) 2.0 2.6 1.5 2.8
Real Consumer Spending (%) 2.0 2.3 2.3 3.3
Real Business Equipment (%) 4.5 3.5 5.0 5.0
Real Residential Investment (%) 15.5 6.9 5.0 15.0
Core PCE Inflation (%) 1.7 1.2 1.6 1.8
Unemployment Rate (%) 7.8 (a) 7.0 (a) 6.0 (a) 5.7 (a)
Federal Funds Target (%) 0-0.25 (a) 0-0.25 (a) 0-0.25 (a) 1.00 (a)
S&P 500 Operating Earnings (yoy %) 6.1 6.4 7.8 5.9
S&P 500 Operating EPS ($) 103.76 110.42 119.00 126.00
(a) Year-end actual/forecasts
Source: BEA, Macroeconomic Advisors, and Omega Advisors, Inc.
Q4 to Q4
U. S. Economic Environment
Nearly all of U.S. fixed-income securities, with
the exception of structured credit, are
uninteresting and unattractive both in an absolute
sense and relative to U.S. equities. This
conclusion includes Treasuries, investment-grade
corporate bonds and high-yield bonds.

Exhibit 16

Exhibit 17

'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
GDP - Quarterly Data from 79:q4 to 14:q1, Yield - Monthly Data to 6/14
-5 -5
0 0
5 5
10 10
15 15
20 20
Source: BEA, FRB, Bloomberg and Omega Adv isors Inc.
Nominal GDP Growth and 10-Year G. Bond Yield
Nominal GDPGrowth,Y/Y %change
10-year Gov't Bond Yield
Exhibit 18

End of
Current 2016 Total Return Avg. Annual Return
2.40% 4% (5)% (2.1)%
2.40% 5% (11)% (4.8)%
2.40% 6% (16)% (7.4)%
Source: Omega Advisors, Inc.
Bonds: Unattractive
Exhibit 19

Source: ICI, and Omega Advisors Inc.
'88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
0 0
200 200
400 400
600 600
800 800
1,000 1,000
1,200 1,200
1,400 1,400
1,600 1,600
1,800 1,800
2,000 2,000
Bond Fund Inflows Above Trend
Cumulative Bond Fund Flows in $Billion Long Term Trend
Source: ICI, and Omega Advisors Inc.
'86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
0 0
200 200
400 400
600 600
800 800
1,000 1,000
1,200 1,200
1,400 1,400
1,600 1,600
1,800 1,800
2,000 2,000
Domestic Equity Fund Inflows Below Trend
Cumulative Domestic Equity Fund Flows in $Billion Inflow Trend, 1986 to 2000 Inflow Trend, 1999 to 2011
Exhibit 20

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Weekly Data f rom Dec 2004 to 8/29/14
0 0
5 5
10 10
15 15
20 20
25 25
30 30
Current: 5.6%
Low: 5.2%
Source: FINRA-Bloomberg, and Omega Adv isors Inc.
Average Yield of High Yield Corporate Bonds
The Avg Yield Weighted by Par, all Bonds in FINRA-Bloomberg US Corp Bond Index
S&P 500 P/E

11/08 = 900/65 = 13.9x
2/09 = 800/62 = 12.9x
Current = 2000/111 = 18.0x
= 2000/119 = 16.8x

Exhibit 21

In this same period,
10-year U.S. Government
Bond yielded an average
of 6.67% and the 3-month
T-bill averaged 4.96%
while the Fed Funds Rate,
since 1970, averaged
5.67%
CPI
(Y/Y% change) P/E Ratio
<1% 15.8X
1% to 3% 16.7
3% to 5% 15.4
5% to 7% 12.8
>7% 8.7
Average (1960 to 2012) 14.9X
S&P 500(b) 16.8
(a) S&P 500 P/E on 12-mont h forward operat ing earnings
(b) As of August 29, 2014. on 2014 CY operat ing earnings est of $119
Source: BLS, St andard & Poor's, Thomson Financial and Omega Advisors, Inc.
S&P 500 P/E and Inflation(a)
Exhibit 22
2014 28.9 1997 2.2
2013 16.9 1996 3.6
2012 53.3 1995 4.5
2011 47.8 1994 2.3
2010 14.7 1993 5.0
2009 11.4 1992 0.9
2008 45.5 1991 1.0
2007 6.6 1990 4.0
2006 1.7 1989 2.0
2005 4.8 1988 3.4
2004 5.5 1987 3.2
2003 5.6 1986 5.4
2002 10.1 1985 3.0
2001 3.6 1984 1.9
2000 3.1 1983 3.5
1999 4.7 1982 7.7
1998 3.8 1981 2.4
Source: St andard and Poor's, Fact Set , and Omega Advisors, Inc.
% of Companies
Dividend Yield Higher Than 10-Yr T-Note Yield
% of Companies
S&P 500 Companies Excluding Financials
Exhibit 23

10-yr bond
P/E Div. yld yld
2014 2014 (Current)
Japan 13.6 1.8% 0.5%
US 16.8 2.0% 2.4%
Europe 13.8 3.2% 2.2%
Source: Omega Advisors, Inc.
Japanese Valuations are attractive
Exhibit 24

Private Pension(a) Households(b) Stock Funds Bond Funds
2000 62.7 % 27.7 % 83.0 % 17.0 %
2001 59.7 23.8 78.7 21.3
2002 51.5 19.0 70.3 29.7
2003 61.3 21.7 74.8 25.2
2004 63.6 21.3 77.3 22.7
2005 64.7 21.6 78.5 21.5
2006 54.9 24.3 79.8 20.2
2007 54.3 22.5 79.5 20.5
2008 35.5 (lowest since '91) 15.2 70.3 29.7
2009 40.1 17.4 69.2 30.8
2010 43.0 19.2 68.5 31.5
2011 39.8 (2nd lowest since '91) 19.0 64.4 35.6
2012 42.5 20.1 63.4 (lowest in 3 decades) 36.6
2013 49.2 23.8 70.1 29.9
(a) Excluding mut ual fund shares
(b) Direct ly held equit ies, including closed-end and ETF funds but excluding mut ual funds
(c) % of asset s in mut ual funds, including ICI's St ock and Bond Funds but excluding Hybrid Funds
Source: Federal Reserve Flow of Funds Account s, Invest ment Company Inst it ut e, and Omega Advisors, Inc.
Investor Asset Allocation
Equity Holdings % of Total Financial Assets Mutual Funds(c)
Exhibit 25

Risks to Our Outlook

Return of the euro zone to recession/deflation
A U.S. recession
Sustained rapid economic growth/worsening inflation expectations in the
United States
A Federal Reserve that falls behind the curve
A failure of Japan Abenomics and BOJ policy
Broad-based U.S. earnings disappointments
China debt risk
Washington dysfunction
Global deflation
Japan/China geopolitical friction
U.S./Russia friction
Emerging market economic weakness which spreads to developed-market
economies
Exhibit 26

'52 '55 '58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12
Quarterly Data f rom 1952 to q1:14
20
40
60
80
100
120
140
160
180
20
40
60
80
100
120
140
160
180
Average
Source: Federal Reserve Flow of Funds, BEA, and Omega Advisors Inc.
Market Value of U.S. Corporations as a % of GDP
Total Market Value of U.S. Corporations as a % of Nominal GDP Av erage +1 SD -1 SD
Exhibit 27

'60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Weekly Data f rom Dec 2004 to 8/29/14
-2 -2
-1.5 -1.5
-1 -1
-0.5 -0.5
0 0
0.5 0.5
1 1
1.5 1.5
2 2
2.5 2.5
3 3
Source: Bloomberg, Datastream and Omega Adv isors Inc.
Average of Various Valuation Metrics
Equal Weighted Z -Score of The Following Valuation Metrics: Fwd P/E, Trailing P/E, Y/Y Change
in P/E, Market Cap to GDP, CAPE, Tobins Q
Exhibit 28

'50 '53 '56 '59 '62 '65 '68 '71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13
6 6
8 8
10 10
12 12
14 14
16 16
18 18
Source: BEA, Bloomberg, and Omega Adv isors Inc.
Corporate Profits as % of GDP
Corporate Prof its without IVA and CCA adj as % of GDP
Exhibit 29

'60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14
5 5
10 10
15 15
20 20
25 25
30 30
Source: Standard & Poors, Thomson Reuters and Omega Advisors Inc.
S&P 500 12M Forward PE
S&P 500 P/E on 12-month Forward Operating EPS
'60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14
5 5
10 10
15 15
20 20
25 25
30 30
35 35
Source: Standard & Poors, Thomson Reuters and Omega Advisors Inc.
S&P 500 Trailing PE
S&P 500 P/E on 12-month Trailing Operating EPS
'61 '63 '65 '67 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13
Annual Data from 1961 to 2013, Aug 2014 Y/Y
-40 -40
-20 -20
0 0
20 20
40 40
60 60
Source: Standard & Poors, and Omega Advisors
Y/Y % Change in Trailing P/E
Y/Y % Change in P/E based on trailing 4Q EPS
Exhibit 30

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14
Monthly Data from1/90 to 8/14
8 8
10 10
12 12
14 14
16 16
18 18
20 20
22 22
Source: RBC, and Omega Adv isors Inc.
S&P 500 ex-Financials Median P/E
S&P500 es-Financials Median P/E Average
'52 '55 '58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12
Quarterly Data from1952 to q1:14
20
40
60
80
100
120
140
160
180
20
40
60
80
100
120
140
160
180
Average
Source: Federal Reserve Flow of Funds, BEA, and Omega Advisors Inc.
Market Value of U.S. Corporations as a % of GDP
Total Market Value of U.S. Corporations as a % of Nominal GDP Av erage
+1 SD -1 SD
'60 '63 '66 '69 '72 '75 '78 '81 '84 '87 '90 '93 '96 '99 '02 '05 '08 '11 '14
Monthly Data from3/60 to 8/14
0 0
5 5
10 10
15 15
20 20
25 25
30 30
35 35
40 40
45 45
50 50
Average
Source: Shiller and Omega Adv isors
CAPE
Cyclically Adjusted P/E Average
'52 '55 '58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12
Quarterly Data from54:q4 to 14:q1
0.2 0.2
0.4 0.4
0.6 0.6
0.8 0.8
1 1
1.2 1.2
1.4 1.4
1.6 1.6
1.8 1.8
Source: Datastream, and Omega Advisors Inc.
S&P 500 - Tobin Q
S&P500 Market Cap to Replacement Cost Average +1 SD
-1 SD
Exhibit 31

Historical Bull Market Cycles -- S&P 500
Date of Trough Date of Peak Duration T to P % Ch T to P
Apr 1942 May 1946 49 months 157.1%
Jun 1949 Dec 1952 42 96.2
Sep 1953 Aug 1956 35 119.0
Dec 1957 Jul 1959 19 53.8
Oct 1960 Dec 1961 14 38.9
Jun 1962 Jan 1966 43 79.8
Sep 1966 Nov 1968 25 48.0
Jun 1970 Jan 1973 31 73.5
Oct 1974 Dec 1976 26 72.5
Mar 1978 Nov 1980 32 61.7
Aug 1982 Aug 1987 60 228.8
Dec 1987 Jul 1990 31 64.8
Oct 1990 Mar 2000 112 417.0
Oct 2002 Oct 2007 60 101.5
Average 41.3 115%
Mar 2009 August 2014 (a) 65 months 196%
(a)As of August 27, 2014
Source: Standard & Poor's and Omega Advisors, Inc.
Exhibit 32

'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24
Annual Data from 2008 to 2023
40 40
45 45
50 50
55 55
60 60
65 65
70 70
75 75
80 80
Actual Projected
Source: CBO, and Omega Advisors Inc.
CBO Projection: Federal Debt as a % of GDP
May 2013: Federal debt held by public, as % of GDP
Feb 2014: Federal debt held by public as % of GDP
Exhibit 33

'90 '95 '00 '05 '10 '15 '20 '25 '30 '35 '40 '45 '50 '55 '60
Annual data from 1990 to 2060
15 15
20 20
25 25
30 30
35 35
40 40
Actual Projection
The Demographic Time Bomb
Source: Census Bureau and Omega Advisors, Inc.
Americans 65 and older as a % of working-age Americans (15-64 years old)
Exhibit 34

S&P 500
(a)
Earnings Growth Rate
(b)
5.0%
Dividend Yield
(c)
2.0%
Price to Book
(d)
2.7X
LT Debt /Capital
(e)
35.1%
Return on Equity
(f)
15.8%
P/E Ratio
(g)
16.3
(a) As of August 29, 2014
(b) Next 3-5 years operating earnings growth rate
(c) Latest 4Q trailing dividend as a % of S&P 500 index
(d) S&P 500 index divdided by latest book equity
(e) Long-term debt as a % of total capital
(f) Latest 4Q trailing operating earnings as a % of latest book equity
(g) S&P 500 divided by the forward 4Q opearting earnings
Source: Standard and Poor's, FactSet, Thomson Reuters, and Omega Advisors, Inc.
Financial Characteristics of the S&P 500
Exhibit 35

Omega Advisors, Inc.
Best Ideas
09/02/14 2014 2015 Div. Growth Rate
Ticker Description Price EPS PE EPS PE Yield 3 to 5 yrs
GARP (Growth at a Reasonable Price)
ACT ACTAVIS PLC 229.07 13.50 17.0 18.00 12.7 0.0% 15.0%
C CITIGROUP INC 51.96 4.90 10.6 5.75 9.0 0.1% 8.0%
TMO THERMO FISHER SCIENTIFIC INC 122.72 7.25 16.9 8.50 14.4 0.5% 15.0%
Income & Growth
ATLS ATLAS ENERGY LP 44.06 2.10 21.0 2.50 17.6 4.4% 16.0% (1)
GLPI GAMING AND LEISURE PROPERTIE 33.36 2.60 12.8 3.00 11.1 6.2% 10.0%
KKR KKR & CO LP 23.31 2.80 8.3 2.90 8.0 11.5% 5.0%
NAO NORDIC AMERICAN OFFSHORE LTD 19.25 1.80 10.7 2.20 8.8 9.4% 20.0%
Asset Restructuring Play
QEP QEP RESOURCES INC 35.25 1.40 25.2 1.70 20.7 0.2% 15.0%
SVU SUPERVALU INC 9.51 0.72 13.2 0.83 11.5 0.0% 12.0%
High Risk/High Return
ASPS ALTISOURCE PORTFOLIO SOL 101.86 9.41 10.8 9.66 10.5 0.0% 10.0% (2)
577 HK LOUIS XIII HOLDINGS LTD 5.40 n/a - n/a - 0.0% n/a (3)
MONI.LN MONITISE PLC (in GBP) 47.75 n/a - n/a - 0.0% 40.0% (4)
SD SANDRIDGE ENERGY INC 5.16 0.15 34.4 0.20 25.8 0.0% 25.0% (5)
(1) Distributable cash flow per share NOT EPS
(2) Adj. EPS excluding amortization of intangible related to Equator acquisition.
Assumes liquidation of OCN's servicing portfolio and no growth in ASPS origination business.
(3) Expected to open mid-2016. 2017 FCF/sh HK$ 4 (range HK$2 - HK$8). Liquidation value in the event of failure is estimated at HK$6/sh
(4) Growth rate in sales, assuming a 7-fold rise in users over 4 years.
(5) NAV is $10/share
NOTES TO INVESTMENT RESULTS

Alternative Investment such as hedge funds are subject to less regulation than other types of pooled investment vehicles such as mutual funds, may make
speculative investments, may be illiquid and can involve a significant use of leverage, making them substantially visible than other investments.

Any offer to sell or solicitation of an offer to buy any investment program or product may only be made by means of delivery of an offering memorandum and
subscription documents that detail the applicable fees, risks and other material terms of such an investment, all of which should be carefully reviewed by any
prospective investor.

Any reference to a specific company does not constitute a recommendation to buy, sell or hold securities of such company.

If any of the assumptions used in the example in this presentation do not prove true, results may vary significantly from the examples shown. These examples
are for illustrative purposes only and do not purport to show actual results.

Opinions and views expressed herein are for informational purposes only and should not be construed as investment advice. They involve a number of
assumptions that may not prove to be valid so that actual results could differ significantly.

No part of this material may, without Omegas prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to
any person that is not an employee, officer, director or authorized agent of the recipient.

References to indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only and
do not imply that the Fund will achieve similar results. The index composition may not reflect the manner in which the Fund is constructed. Indices are
unmanaged and investors cannot invest directly in indices. The S&P 500 Stock Index with dividends reinvested (S&P 500) is a capitalizationweighted
index of the 500 large-cap U.S. publicly-traded common stocks.

This material is provided for educational purposes only and should not be construed as investment advice or an offer to sell, or the solicitation of offer to buy
any security.

This material discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be
construed as investment advice. This information may not be current and Omega has no obligation to provide any updates or changes. We have relied upon
and assumed without independent verification, the accuracy and completeness of all information from third party sources.

Are Equities Still The Best House in The Financial Asset Neighborhood LeonCooperman ValueInvestingCongress 9-8-14

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Are Equities Still The Best House in The Financial Asset Neighborhood LeonCooperman ValueInvestingCongress 9-8-14

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10th annual new york

value investing congress

September 8, 2014 New York, NY

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