Let’s all learn from a real pro. Leon Cooperman, septuagenerian Chairman of Omega Advisors, could have retired a long time ago. But there he was last Friday, participating in Altisource Portfolio Solutions’ (ticker ASPS) conference call with investors. Often, big shots at hedge funds let their analyst-minions mix it up with the little people on such telephonic cluster shows. Not Leon, which might explain why he hasn’t stepped away and joined the board of the New York Public Library or whatever it is retired billionaires do these days. Stock picking and everything that goes with it are probably this guy’s raisons d’être. If he tried to retire, my bet is he’d wind up the Bret Favre of the hedge fund world. Then again, hanging it up would give him more time to shoot his mouth off like he did in 2011 when he likened Obama to Hitler (Neville Chamberlain or Jimmy Carter seems more apt).
Cooperman’s contribution to the Altisource call reveals a speaker of finance lingo at the top of his linguistic game. This is the stuff of Jordan 1988-89, Mantle 1956, Laver 1969. So Bud Fox News asked Hugh Sed, Professor of Linguistics and head of the William Clinton Oratorical Center at the Camden State Normal & Industrial School, to analyze Cooperman’s rhetoric. Below we’ve set forth the relevant quotes from the Altisource transcript and annotated with professor Sed’s comments in brackets (full transcript here):
…and this is addressed to Bill for obvious reasons — whether your testicles are bigger than your brains or your brains are bigger than your testicles? [Professor Sed: This is classic finance-speak: The tough guy talk. And the more money the financier makes, the tougher he thinks he is. Here he is also saying, “I’m so important that I can use inappropriate language and there’s nothing you can do about it.”]
…I look at the numbers and I’m smart enough to understand if you’re buying something back at $19 or $20 that you think can earn as much as 775 or as little as 435, it makes sense. But we have to obviously risk adjust that. [Sed: Finance types love “we.” They never like to go out on a limb alone. After the fact, if the stock’s gone up, they often change their tunes of course, and say things like, “Yeah, I put us into that just before it doubled.]
…If you took a third of that let’s say, take $40 million, that would equate to a dividend of $2 per share which would slap a yield on the stock at 10 and…[Sed: LIke tough guys in a Scorsese movie, finance guys seem to get a sadistic pleasure out of slapping things. Their favorite, of course, is slapping an “EV” multiple on EBITDA.]
So I’d just like to hear that you guys have used very sharp pencils….[Sed: This is a slight variation on a real classic. Often you’ll hear a banker say something like, “We really need to sharpen our pencils and get smart around this.” As an aside, note the use of “around” in that example: bankers seem to like that instead of “on.” Weird, I know. Cooperman has improvised a bit and used “sharp” as an adjective, a very deft turn on his part. He’s good.]
Then secondly, what is the timeline for this repurchase to be effectuated? [Sed: Nice use of a big word with “effectuated.” It’s totally unnecessary, but it screams, “I’m a big hedge fund guy and I’m smarter than you.”]
…In other words I understand that there some need to get your 10-K out which will take time and then shareholder approval etc. but what are we looking at? Because at the end of the day…[Sed: I figured he’d drag out this platitude if he spoke long enough. In all walks of finance, they love “at the end of the day.” It’s an expression they think shows that they have a broad, strategic perspective; that they can think like an MD.]
.…Find a law firm that has common sense that says you have put enough information into the market that if you want to buy back stock you could buy back stock. [Sed: This gives you a good look into how Wall Streeters view lawyers. They think they’re egghead geeks with nothing but book smarts and no common sense, that they’d get eaten alive on a trading floor. They also think that Wall Street lawyers can and should be pushed around to approve borderline illegal things.]
...I just want to make sure that you’ve crossed every T, dotted every I and you understand what you’re doing. Because as I told you a year ago, stock repurchase only makes sense if you are buying back something that is significantly undervalued. [Sed: Hedge fund types often talk to non-hedgies as if they’re about 6- or 7-years-old. It’s because they think that they’re smarter than everyone else and that they need to dumb everything down for the lesser mortals.]
….But I would say on your numbers it’s a no-brainer. [Sed: “No brainer,” another hackneyed favorite. Often finance types say it about something that’s actually quite complicated to make you feel like an idiot if you don’t understand.]
… I’ve said enough. Thank you for listening. I appreciate it.
Professor Sed’s final comment: “The last line is a bit hard to believe. I doubt Cooperman ever thinks he’s said enough.“