A group of billionaires on Friday voiced concerns that there could be a stock market collapse of as much as 40 percent of a Democrat unseats President Donald Trump next year.
Ray Dalio (worth $18.7 billion), Paul Tudor Jones (worth $5.1 billion), and Stanley Druckenmiller (worth $4.7 billion) are just a few of the uber-wealthy who are fretting about tanking stock indices should a Democrat win the White House, particularly if it’s one of the far-Left candidates, The Epoch Times reported.
Dalio estimated a drop of around 22 percent, Jones predicted 26 percent, while Druckenmiller said that a victory by Elizabeth Warren would pull the stock market down between 30 and 40 percent, the news site noted.
Analysts, meanwhile, told the Times that a Trump reelection victory would likely lead to new record highs in all of the stock indices.
Billionaire Paul Tudor Jones predicted at a Nov. 1 economic forum that a Democrat Oval Office win next year would lead to drops on Wall Street that would affect not just the wealth of billionaires and millionaires, but also the 401(k) retirement plans of ordinary Americans.
“We did this poll internally about where the S&P would trade if Elizabeth Warren became president. And then Biden, Buttigieg, Klobuchar etc., and then we took the election probabilities,” he said at last month’s Greenwich Economic Forum.
“Our poll said that if Elizabeth Warren would become President, the S&P would trade around 2,250,” Jones added. “It’s at 3,050 now.”
His model for a Trump victory, meanwhile, showed that the index would grow to 3,600.
“I’m just mechanistic so I go through the calculations and if you take away the way corporate taxes have been changed, the undoing of that, that’s worth 7 or 8 percent,” said Dalio, who shared the stage with Jones.
“If you take the changes in the GAAP accounting, so changes in the taxes, taxes for corporations, that’s worth about 15 percent of earnings and therefore would drop it on that basis alone,” he said.
“If you take then, the wealth tax, that’s 2.8 trillion over 10 years, and that’ll have an effect.”
Others were not so dire. Muir noted that if someone like Warren were to win, it’s far more likely her more extreme economic policies would have to be tempered in order to pass Congress, which could still be at least partially controlled by Republicans.
And that’s if her proposals would gain any traction at all, the Times noted.
Nevertheless, he admitted, “A lot of the policies that she has are very scary for the market, like the financial transaction tax, going after the banks.”