Billionaire investor Leon Cooperman doesn't think a bull market will come anytime soon and sees only a 5% chance of the S&P 500 rising above 4,400.

“What I said in the last program,” the chairman and founder of family office Omega Advisors told CNBC Wednesday evening, referring to a prior TV appearance, “is equities were the best house in the financial asset neighborhood, but I didn’t like the neighborhood — and I still don’t like the neighborhood."

The hedge funder, referring to Genesis 41, added: “I felt like a Pharaoh, the Pharaoh had a dream, the dream was interpreted by Joseph, and the dream was we’re going to have seven lean years following seven fat years. So I think anybody looking for a new bull market any time soon is looking the wrong way.”

Cooperman, 79, attributed his view to financial markets coming off of a "speculative period" in recent years.

SPACS, cryptocurrencies, options trading, and “crazy valuations of the would-be FAANGs” – all of which have made a sharp reversal in 2022 after a boom the prior year – were the outcome of those “fat years,” according to Cooperman.

This pessimism comes after the worst year for stocks since the Global Financial Crisis in 2008. The S&P 500 tumbled 19.4% in 2022 and the Nasdaq Composite wiped out a third of its value. The Dow fell a comparably modest 9% but still rounded out the end of a three-year winning streak for the major averages.

Four trading days into 2023, the indexes are down on the year.

“I think we’ve spent a lot of time pulling demand forward, and we gotta straighten that out,” he added, pointing to a super tight labor market that has 1.7 job openings for every worker looking, presenting a challenge for corporate profit margins.

Cooperman placed the chances of the S&P 500 staying in a range of 3,600 to 4,400 in 2023 at 50%, the likelihood of the index rising above 4,400 at 5%, and the possibility of levels falling into the low 3,000s range at 45%. The index closed at 3,808.10 on Thursday.

In Cooperman's view, the latter depends on whether the Federal Reserve attempts to achieve its long-term inflation target of 2% rather than settling at 3-4%.

The Consumer Price Index (CPI) rose at an annual clip of 7.1% in November, the latest reading before December’s report drops next week. The Personal Consumption Expenditure (PCE) Price Index rose 5.5% the same month.

Cooperman also emphasized that a lack of confidence in the system because of “foolish policies” is even more of a burden than inflation and the Federal Reserve.

“I would basically take the position that we are in a market of stocks rather than the stock market,” Cooperman said. “I expect very little over the next few years.”

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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