- Billionaire Paul Tudor Jones, the founder of $21 billion Tudor Investment Corp., compared the coronavirus pandemic to decades-old film "The Day The Earth Stood Still" in a call hosted by the Economic Club of New York.
- He said the pandemic has thrown off economic models so much that people would "be better off getting financial advice from TikTok" than from experts.
- "I've never seen anything more challenging — and I guess intellectually stimulating also," he said in front of a star-filled sky background on a Zoom call.
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There are "a lot of paradoxes out there," according to billionaire Paul Tudor Jones.
Jones, the founder of $21 billion Tudor Investment Corp., admits he had to eat "some humble pie" as the markets have surged since they bottomed out in March, despite unemployment at a higher percentage of the country than during any time during the financial crisis. He's not alone, with fellow billionaire Stanley Druckenmiller telling CNBC earlier this week that he's been humbled by rally.
"I feel so sorry for the Fed members tomorrow," Jones said on a Zoom call hosted by the Economic Club of New York. Jones had a background up of a starry night because he said he felt like he's in "The Twilight Zone" or "Lost in Space".
"Any kind of forecast that's 24 months out, it's at best an educated guess ... you can't have any kind of conviction or confidence around it."
But the paradox that is confounding Jones is the most is that, thanks to aggressive payroll protection programs from Congress, people have more cash and personal income to spend after "the shortest recession ever" than they did coming into it.
"They can only go on for so long," he said of the programs, but their impact has created a tremendous market rally.
"We've got Modern Monetary Theory in practice," he said of the fiscal and monetary policies used to offset the pandemic.
Modern Monetary Theory, an economic thesis backed by Stony Brook University economics professor Stephanie Kelton and popularized by progressive politicians like Bernie Sanders and Alexandra Ocasio-Cortez, posits that the government can continually print money without the risk of inflation because inflation is caused by a lack of production instead of an increase in cash.
The combination of the pandemic and resulting stimulus programs has frustrated money managers across the board, and Jones jokingly recommended that people would "be better off getting financial advice from TikTok" than from experts.
He named the boogeyman that most do when looking at these stimulus programs: the possibility of inflation. He called it "the biggest risk of the party ending down the road," but noted that the environment — between a pandemic, global protests over police brutality, and a presidential election in the fall — is nearly impossible to read.
"I've never seen anything more challenging — and I guess intellectually stimulating," he said.
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- Stock-picking hedge funds are suddenly back in vogue— a welcome shift for an industry that's hemorrhaged billions
- Investors' usual way of valuing companies is under scrutiny— and it could mean the end of the unprofitable unicorns that dominated in the last decade
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